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BOOKSELLERS  and  others  desiring  an  agency  where  none  has  been , 
established  can  ascertain  terms,  &c.,  by  addressing  the  Publishers, 

IV.    A.    TOWNSEND    &    CO., 

46  WALKER  STREET,   NEW  YORK. 


JAMES  FENIMORE  COOPER: 

OPINIONS     OF     HIS     WORKS     FROM     DISTINGUISHED 
AUTHORS,    STATESMEN,    ETC. 


WASHINGTON    IRVING. 

"Cooper  emphatically  belongs  to  the  nation.  He  has  left  a  space  in  our  litera 
ture  which  will  not  easily  be  supplied." 

GEORGE   BANCROFT. 

"The  glory  which  he  justly  won  was  reflected  on  his  country,  and  deserves  the 
grateful  recognition  of  all  who  survive  him.  His  surpassing  ability  has  made  his 
own  name  and  the.  names  of  the  creations  of  his  fancy  '  household  words'  through 
out  the  civilized  world." 

EDWARD  EVERETT. 

"The  works  of  our  great  national  novelist  have  adorned  and  elevated  our 
literature.  There  is  nothing  more  purely  American,  which  the  latest  posterity 
'  will  not  willingly  let  die.' " 

WILLIAM  H.   PRESCOTT. 

"  His  writings  are  instinct  with  the  spirit  of  nationality.  In  his  productions 
every  American  must  take  an  honest  pride.  For  surely  no  one  has  succeeded  like 
Cooper  in  the  portraiture  of  American  character,  or  has  given  such  glowing  and 
eminently  truthful  pictures  of  American  scenery." 

WILLIAM  CULLEN  BRYANT. 

"  He  wrote  for  mankind  at  large ;  hence  it  is  that  he  has  earned  a  fame  wider 
than  any  author  of  modern  times.  The  creations  of  his  genius  shall  survive 
through  centuries  to  come,  and  only  perish  with  our  language." 

DANIEL   WEBSTER. 

"The  enduring  monuments  of  Fenimore  Cooper  are  his  works.  While  the  love 
of  country  continues  to  prevail,  his  memory  will  exist  in  the  hearts  of  the  people. 
...  So  truly  patriotic  and  American  throughout,  they  should  find  a  place  in 
every  American's  library." 

LEWIS   CASS. 

"  His  country  and  the  world  acknowledge  and  appreciate  his  claims,  and  the 
productions  of  his  genius  will  go  down  to  posterity  among  the  noblest  efforts  of 
the  age.  He  will  ever  live  in  the  history  of  human  greatness." 

CHARLES   SUMNER. 

"As  a  patriot,  who  loved  his  country,  who  illustrated  its  history,  who  advanced 
its  character  abroad,  and,  by  his  genius,  won  for  it  the  unwilling  regard  of  foreign 
nations,  he  deserves  a  place  in  the  hearts  of  the  American  people." 

HENRY  W.  LONGFELLOW. 

"The  country  owes  him  a  great  debt  of  gratitude,  and  all  who  are  of  the  guild 
of  authorship  should  show  the  most  alacrity  in  paying  it.  I  was  in  no  country  of 
Europe  where  the  name  of  Cooper  was  not  familiarly  known." 

FRANCIS   PARKMAN,   JR. 

"For  myself,  I  have  always  felt  a  special  admiration  for  Cooper's  writings. 
They  were  my  chosen  favorites  as  a  boy,  and  I  may  say,  without  exaggeration, 
that  Cooper  has  had  an  influence  in  determining  the"  course  of  my  life  and 
pursuits." 

JOHN  P.   KENNEDY. 

"No  man  has  done  more  in  his  sphere  to  elevate  and  dignity  our  national 
character  than  Fenimore  Cooper.  His  genius  has  contributed  a  rich  fund  to  the 
instruction  and  delight  of  his  countrymen,  which  will  long  be  preserved  among 
the  choicest  treasures  of  American  letters,  and  will  equally" conduce  to  render  our 
national  literature  attractive  to  other  nations." 


( 


THE 


MISSISSIPPI  BUBBLE 


A  MEMOIR  OF 


JOHN    LAW. 


BY       ^  D  O  m,  3?  H  IE       THIERS, 

u 
ATWHOR  OP  "THE  CONSULATE  AND  EMPIRE,"  ETC. 


TO   WHICH   ARE    ADDED, 


Authentic  Accounts  of  the  Darien  Expedition,  and  the  South 
Sea  Scheme. 


TRANSLATED     AND      EDITED     BY 

FRANK  S.  FISKE. 


NEW  YORK: 

W.    A.    TOWNSEND    &    COMPANY. 
1859. 


/r<3" 


07 


PttELAf 

ENTERED  according  to  Act  of  Congress  iu  the  year  1859,  by 
W.    A.    TOWNSEND   &   CO., 

In  the  (Jerk's  Office  of  the  Distiict  Court  of  the  United  States  for  the  Southern  District  of 
New  Yoik. 


W.  H.  TINSON,  Stereotypes 


PEEFACE  TO  THE  FKENCH  EDITION. 


WE  publish,  with  the  consent  of  the  author,  a  his 
torical  work,  clear,  distinct  and  complete,  although 
short,  upon  the  system  of  Law.  This  work,  which  first 
appeared  in  an  encyclopedic  review  about  thirty  years  ago, 
produced  a  great  sensation,  and  attracted  to  the  then 
young  author  the  attention  of  thinking  men.  We  have 
reperused  it,  and  it  seems  t"b  us  that,  notwithstanding  numer 
ous  volumes  have  been  published  before  and  since  upon  the 
system  of  LAW,  no  one  has  ever  presented,  in  a  more  pre 
cise  and  satisfactory  manner,  this  singular  financial 
phenomenon.  It  also  seems  to  us  that  no  one  has  so  suc 
cessfully  and  ably  deduced  the  important  lessons  which  it 
contains ;  lessons  which  it  is  not  useless  to  reproduce  to 
day,  for  the  spirit  of  Law  is  present  in  all  places  and  at  all 
tunes.  We,  therefore,  offer  what  appears  to  us  to  be  a 
desirable  edition  of  the  work  of  M.  Thiers  ;  for  it  has  never 
been  printed  in  a  separate  volume?  and  many  readers  have 
often  asked  for  it  in  vain  both  in  French  and  in  foreign 
bookstores.  We  offer  it  in  the  form  which  we  think  at 
once  elegant  and  convenient,  and  have  submitted  the  proof 

vii 


774212 


PREFACE. 


sheets  to  the  author,  who  has  had  the  kindness  to  go  over 
them  carefully  himself  and  make  some  corrections  of  this 
work  of  his  youth.  We  hope,  then,  that  this  new  edition, 
the  only  one  in  a  separate  volume,  will  be  well  received 
by  an  enlightened  public,  who  are  always  friendly  to  a 
sound  and  useful  literature. 


CONTENTS. 


CHAPTER  I. 

Law's  birth,  parentage  and  education — His  personal  appearance 
and  qualities — His  early  career  in  London — Duel  and  its  conse 
quences — His  travels  and  financial  studies  on  the  Continent — 
Difference  between  money  and  wealth — Banks  and  banking — 
Paper  money — Law  not  guilty  of  the  errors  attributed  to  him — 
His  system  of  a  general  bank — His  attempt  and  failure  to  estab 
lish  a  territorial  bank  in  Scotland, 13 

CHAPTER  II. 

-/•^ 

Law  resumes  his  travels — His  success  at  the  gaming-table — Pro 
poses  his  system  to  various  governments — State  of  the  French 
finances — Measures  of  the  Regent— Debasing  the  coin — Its  effect 
— Law  offers  his  plans — Objections  raised  to  it — Establishment 
of  Law's  private  bank — Its  favorable  reception  by  the  people — 
Its  benefit  to  trade — Its  extension  into  the  provinces — Astonish 
ing  success, 35 

CHAPTER  III.  • 

Law's  scheme  of  a  commercial  company— The  Mississippi  company 
— Jealousy  of,  and  opposition  to,  Law — He  is  sustained  by  tho 


X  CONTENTS. 

Kcgent — The  brothers  Paris — The  anti-system — Law  initiates  a 
speculation  in  stocks — Companies  of  the  East  and  West  Indies 
united — Shares  rise  rapidly — The  rue  Quincampoix — Stockbrokers 
— Run  on  the  bank — Law  triumphs  over  everything, 57 

CHAPTER  IV.  ^ 

The  national  debt — Law's  project  for  redeeming  it — Caution  neces 
sary  in  executing  the  project — The  collection  of  the  revenue 
granted  to  Law's  company — Arrangements  for  the  assumption  of 
the  national  debt  by  the  company — General  eagerness  to  subscribe 
for  the  shares — The  nobility  pay  court  to  Law — Rage  for  specu 
lation  begins — Stockjobbing  operations  of  the  brokers 81 

CHAPTER  V. 

Mistake  in  the  details  of  the  execution  of  Law's  project — New  privi 
leges  granted  to  the  company — Speculation  attracts  all  classes 
and  affects  all  kinds  of  business — Foreigners  arrive — Tricks  of 
'  the  brokers — Fortunes  made  in  a  few  hours — Actual  value  of  the 
shares — Law  idolized — Anecdotes — His  conversion — Courted  by 
foreign  governments — Continued  success  of  the  bank — Excessive 
luxury  of  speculators — Income  of  the  company, 99 

CHAPTER  VI. 

Extravagant  prices  of  goods — First  decline  of  shares — Drain  of  specie 
from  the  bank — Forced  measures  resorted  to — Attempts  to  revive 
confidence  by  adding  new  functions  to  the  company — Letter  to  a 
creditor — Panic  increases — Odious  measures — Licentiousness  of 
the  realizers — Bank  notes  might  and  should  have  been  discon 
nected  from  the  shares — Violent  and  criminal  plan,  125 


CONTENTS.  XI 

CHAPTER  VII. 

The  bank  and  the  company  united — Price  of  the  shares  fixed — 
Measures  for  regulating  the  exchange  of  shares — Frightful  de 
preciation  of  bank  notes — Debtors  the  only  persons  benefited — 
Father  betrayed  by  his  son — Speculators  dispersed  by  soldiers — 
Second  "Letter  to  a  Creditor" — Ingratitude  of  the  Mississippians 
— Murder  and  robbery  by  a  young  nobleman — Firmness  of  the 
Regent, 143 

CHAPTER  VIII. 

Circulation  of  gold  prohibited — Reduction  of  the  nominal  value  of 
shares  and  bank  notes — Great  clamor  raised — Whole  blame  of 
the  reduction  falls  on  Law — Regent  yields  to  the  clamor — He 
retains  Law  in  his  favor — Law  repeals  some  of  the  most  obnox 
ious  regulations — Measures  to  abolish  the  System — Difficulties  in 
carrying  them  out,  159 

CHAPTER  IX. 

"Spoils  of  the  Mississippians" — Further  efforts  to  bring  in  the 
notes — Men  suffocated  in  the  crowd  at  the  bank — Mob  pursue 
Law — He  seeks  protection  at  the  palace  of  the  Regent — Bank 
closed — Tampering  with  the  currency — Severities  toward  the 
Mississippians — Final  abolition  of  the  System — Law  quits  France 
— Confiscation  of  his  property, 179 

CHAPTER  X.    / 

Recapitulation — Comparison  between  this  and  other  financial  catas 
trophes — Reflections, 205 


x  CONTENTS. 

PAGE 

THE  DARIEN  EXPEDITION, 231 

Notes  to  Darien  Expedition, 252 

Enthusiasm  of  the  Scotch, 254 

Difficulties  at  the  Start, 254 

Opposition  of  the  English, 255 

Opposition  of  the  Dutch, 256 

Disastrous  Result, 257 

THE  SOUTH  SEA  BUBBLE, 261 

Notes  to  South  Sea  Bubble, .  333 


CHAPTER  I. 

Law's  birth,  parentage  and  education — His  personal  appearance 
and  qualities — His  early  career  in  London — Duel  and  its  conse 
quences — His  travels  and  financial  studies  on  the  Continent — 
Difference  between  money  and  .wealth — Banks  and  banking — 
Paper  money — Law  not  guilty  of  the  errors  attributed  to  him — 
His  system  of  a  general  bank — His  attempt  and  failure  to  estab 
lish  a  territorial  bank  in  Scotland. 


JOHN  LAW 


AND 


THE  MISSISSIPPI  BUBBLE, 


CHAPTEK    I. 

JOHN  LAW  was  born  in  Edinburgh,  in  April,  1671. 
His  mother,  Jane  Campbell,  was  descended  from 
the  famous  ducal  house  of  Argyle.  His  father, 
William  Law,  followed  the  profession  of  a  gold 
smith,  which,  by  its  privileges,  its  respectability, 
and  its  riches,  was  equivalent,  at  that  time,  to  that 
of  the  bankers  of  the  present  day  among  commer 
cial  nations.  William  Law  acquired  a  considerable 
fortune,  and  bought  in  Scotland  the  two  estates  of 
Randleston  and  of  Lauriston.  He  died  very  young, 
and  left  his  oldest  son,  John  Law,  scarcely  fourteen 
years  old. 

This  son  wras  educated  with  great  care,  and  mam- 
is 


16  MEMOIR   OF  JOHN   LAW. 

fested  a  singular  aptitude  for  every  kind  of  study. 
He  hastened  to  enjoy  the  independence  of  his  for 
tune  ;  did  not  choose  to  embrace  the  profession  of 
his  father ;  and  preferred  to  a  sedentary  and  labo 
rious  life,  one  of  pleasure,  travel,  and  the  study  of 
the  liberal  sciences.  He  was  handsome,  tall,  well- 
made,  and  full  of  dexterity  and  grace ;  he  excelled 
in  all  bodily  exercises,  and  especially  in  the  tennis 
court,  which  was  then  very  much  in  vogue  in 
Scotland.  His  mind  was  not  less  distinguished 
than  his  person;  he  expressed  himself  with  ease 
and  force,  and  manifested  an  extraordinary  aptness 
for  arithmetic  and  the  exact  sciences. 

At  twenty  years  of  age  he  left  his  mother,  and 
went  from  Edinburgh  to  London.  He  employed 
his  time  in  gaming,  in  the  society  of  women,  and  in 
studying  the  mysteries  of  credit  and  of  commerce. 
Endowed  with  an  inquisitive  spirit  and  an  impetu 
ous  temper,  he  formed  an  extensive  acquaintance, 
and  plunged  into  great  dissipation.  Applying  a 
scientific  calculation  to  the  plays  of  the  gaming 
table,  he  made,  without  unfairness,  considerable 
sums,  but  his  expenses  were  still  more  considerable 
than  his  gains,  and  he  ended  by  contracting  large 
debts.  Constrained  by  necessity,  he  wished  to  dis 
pose  of  the  estate  of  Lauriston,  which  had  been  left 
him  by  his  father.  Fortunately  for  him,  Jane  Camp- 


17 


bell,  wlio  watched  over  him  like  a  tender  and  pru 
dent  mother,  came  to  his  aid,  paid  his  debts,  and 
saved  him  his  estate  of  Lauriston. 

The  real  merits  of  Law,  the  charm  of  his  man 
ners,  and  his  fortune,  had  brought  him  into  intimate 
association  with  the  principal  nobility  at  London. 

A  young  married  lady  was  the  cause  of  a  du?el 
between  him  and  a  nobleman,  and  he  was  so  un 
fortunate  as  to  kill  his  adversary  by  running  him 
through  the  body.  Arraigned  before  the  royal 
commissioners,  he  was  condemned  to  death.  He 
was  pardoned  ;  but  being  thrown  into  prison  at  the 
demand  of  the  family  of  his  antagonist,  he  effected 
his  escape,  and  fled  to  the  Continent.  (NOTE  1.) 

Law  was  then  twenty-four  years  old.  He  trav 
elled  through  various  countries,  visited  France,  still 
brilliant  with  the  prosperity  which  sprung  from  the 
administration  of  Colbert,  and  repaired  to  Holland 
to  study  there  the  spirit  of  those  proud,  rich  repub 
licans  who  had  just  acquired  the  inheritance  of  the 
Venetians  and  Portuguese,  and  covered  every  sea 
with  their  vessels. 

Amsterdam  was  at  that  time  the  commercial 
metropolis  of  Europe.  The  interest  on  money  there 
rarely  exceeded  two  or  three  per  cent.  She  had  a 
Jbank,  celebrated  and  mysterious,  whose  credit  had 
withstood  the  invasion  of  Louis  XIV.,  whose  trea- 


18  MEMOIR   OF   JOHN   LAW., 

smy  seemed  inexhaustible,  and  whose  system  was 
an  enigma  even  to  those  who  devoted  themselves  to 
the  study  of  finance. 

Law,  in  order  to  investigate  more  closely  the 
mechanism  of  this  bank,  became  a  clerk  of  the 
English  Resident,  and  in  this  manner  added  greatly 
to  his  knowledge  of  all  subjects  connected  with 
commerce  and  finance. 

Law  returned  to  Scotland  about  the  year  1700, 
being  then  nearly  thirty  years  old,  and  having 
acquired  vast  information.  He  was  struck  with 
the  contrast  which  his  own  country  presented  to 
that  which  he  had  just  visited.  Instead  of  the 
extended  commerce  and  the  great  and  active  traffic 
which  he  observed  in  England  and  Holland,  he 
found  the  country  poor  and  paralyzed  by  inaction. 

Scotland,  mountainous  and  almost  an  island,  had 
a  sufficiently  productive  soil ;  it  was  inhabited  by 
an  intelligent  and  laborious  population,  but  needed 
capital  to  develop  its  agriculture  and  extend  its 
commerce  and  manufactures.  The  Scotch,  like  all 
mountaineers,  were  endowed  with  active  faculties, 
which  there  was  no  opportunity  to  exercise  at  home, 
and  they  expatriated  themselves  to  seek  their  for 
tunes  in  richer  countries. 

Law  attributed  the  languishing  condition  of  Scot 
land  to  the  deficiency  of  capital.  He  was  undoubt- 


CAPITAL    AND    CUKBENCY.  19 

edly  riglit ;  but,  confounding  capital  with  currency, 
which  is  simply  a  means  of  exchange,  he  imagined 
that  an  abundance  of  money  was  the  caMse  of 'the 
riches  of  states  whose  prosperity  money  had  only 
developed. 

He  says  to  himself : 

"  What  is  wanting  to  the  proprietor  to  enable 
him  to  clear  up  his  lands ;  to  the  manufacturer  to 
multiply  his  looms  ;  to  the  merchant  to  extend  his 
operations?  Advances,  that  is  to  say  money,  to 
pay  for  the  first  materials  and  the  manual  labor. 

"  With  a  few  more  millions  we  could  pay  the 
laborer  who  wishes  to  emigrate,  we  could  retain 
him  upon  his  native  soil,  and  procure  all  the 
material  necessary  to  occupy  his  labor.  Holland, 
with  a  sterile  soil,  whose  low  banks  expose  it  con 
stantly  to  the  dangers  of  the  flood,  is  the  richest 
country  in  the  world.  Why  ?  Because  she  over 
flows  with  money. 

"  By  what  means  can  money  be  supplied  ?  It  is 
credit ;  it  is  the  establishment  of  banks  which  give 
to  paper  the  value  and  efficiency  of  specie." 

Law  thus  involved  himself  by  degrees  in  an  error 
which  the  appearance  of  an  abundant  currency 
often  occasions.  He  thought  that  the  prosperity 
of  a  country  depended  upon  the  amount  of  money 
in  circulation,  and  that  this  amount  might  be 


MEMOIR   OF   JOHN    LAW. 


increased  at  pleasure.  However,  money  is  not  food 
which  will  nourish  a  man,  cloth  which  will  clothe 
him,  tools  with  which  he  can  work ;  money  is  the 
equivalent  which,  by  way  of  exchange,  serves 
to  procure  all  these  things ;  but  the  things  them 
selves  must  first  exist.  Cover  a  desert  isle  with  all 
the  gold  of  the  Americas,  or  with  all  the  notes  of  the 
Bank  of  England,  and  we  should  not  at  once  find 
roads,  canals,  husbandry,  manufactures— in  a  word, 
business.  If  by  any  means  the  amount  of  money 
in  a  country  could  be  increased  without  a  propor 
tionate  increase  in  the  amount  of  everything  else, 
the  prices  would  only  be  raised  without  increasing 
actual  wealth,  because  a  greater  quantity  of  cash 
would  be  put  in  the  balance  with  the  same  quantity 
of  merchantable  articles. 

Money,  then,  is  not  wealth ;  it  is  the  result  of 
wealth,  and  increases  gradually  with  wealth.  In 
proportion  as  business  activity  increases  and  indus 
try  and  commerce  become  more  developed,  the 
products,  more  numerous,  must  be  exchanged  more 
frequently  and  with  greater  rapidity ;  traffic  must 
increase  in  the  same  proportion  as  production. 
Then  money,  the  medium  of  exchange,  must  become 
more  abundant,  because  it  is  always  attracted 
where  it  is  needed.  Soon,  to  money,  a  slow  and 
expensive  means  of  exchange,  must  succeed  bills, 


BANKS.  21 

a  means  easy,  prompt,  and  above  all,  economical. 
Banks  will  certainly  be  established :  they  are  the 
result  of  an  anterior  prosperity,  and  serve  effectively 
to  increase  it,  but  never  precede  it,  because  the 
creation  of  products  must  precede  the  demand  for 
their  circulation. 

If  Law,  deceived  by  the  first  appearances  of  an 
expanded  currency,  attributed  too  great  results  to 
money  alone,  he  was  not  mistaken  as  to  the  means  of 
increasing  it  by  credit.  He  had  explained  and  de 
veloped,  in  a  remarkable  pamphlet,  the  operation 
of  banks  better  than  it  had  ever  been  done  before. 

There  are,  as  every  one  knows,  banks  of  deposit 
and  lanJcs  of  discount.  One  deposits  his  cash  in 
the  first,  and  takes  a  certificate  of  deposit,  which 
serves  the  purposes  of  cash  in  making  payments. 
The  advantage  of  these  banks  is,  that  they  substi 
tute  for  coin,  paper  which  represents  its  value,  and 
is  at  the  same  time  more  easily  transported  and 
counted.  The  utility  of  banks  of  discount  is 
entirely  different.  A  bank  of  this  kind  examines 
commercial  bills,  that  is,  promises  to  pay,  subscribed 
by  one  person  in  favor  of  another,  and  if  it  con 
siders  them  good,  it  gives  for  them,  in  consideration 
of  interest,  the  value  in  notes  which  bear  its  own 
guaranty  and  are  current  as  money.  This  is  what 
is  called  discount.  Its  function  is  to  change  com- 


22  MEMOIR   OF   JOHN   LAW. 

mercial  bills  and  notes,  which  are  not  current  as 
money,  into  its  own  notes,  which  are  current,  and 
thus  enable  them  to  be  changed  for  anything  else. 
In  order  to  do  this  with  security,  it  must  have  funds 
which  are  responsible  for  mistakes  which  it  is  liable 
to  make  in  accepting  worthless  paper.  Beside,  as 
the  notes  which  it  issues  depend  upon  the  public 
confidence  for  their  circulation,  it  must  always  be 
ready  to  convert  them  into  coin  at  the  wish  of  the 
holder,  and  it  is  for  this  purpose  that  it  holds  its 
specie  reserve.  Its  funds  should  always  meet  the 
losses  which  it  may  sustain,  and  its  specie  reserve 
should  always  suffice  for  the  redemption  of  notes 
which  the  holders  are  disposed  to  present  for  specie. 
When  confidence  is  established,  holders  of  notes  do 
not  wish,  to  exchange  them  for  specie,  except  when 
they  desire  smaller  sums,  or  for  some  purpose 
where  specie  alone  can 'be  used. 

Thus,  the  specie  reserve  need  be  only  sufficient 
for  the  requirements  of  traffic,  in  paying  sums 
smaller  than  the  notes,  or  .for  meeting  certain  spe 
cial  necessities.  A  bank  of  discount,  then,  effects 
an  actual  increase  of  currency,  or,  in  other  words, 
increases  the  facilities  of  exchange  by  metamorphos 
ing  commercial  bills  into  bank  notes  circulating  as 
readily  as  coin  itself. 

One  advantage  of  the  establishment  of  banks,  Law 


PAPER   MONEY.  23 

appreciated  as  much  as  the  increase  of  currency — 
that  was  the  introduction  of  paper  money.  Law 
esteemed  this  of  special  importance.  Paper,  in 
fact,  can  be  transported  to  any  distance  without 
difficulty ;  it  is  easily  counted ;  it  is  not  merchan 
dise,  like  the  precious  metals,  whose  value  changes 
according  to  the  quantity  in  the  market.  For  all 
these  reasons  Law  thought  it  preferable  to  gold  and 
silver  for  the  requirements  of  business. 

He  was  right  in  many  respects,  and,  notwith 
standing  his  high  estimation  of  the  virtues  of  paper 
money,  he  did  not  fall  into  an  error  which  his  com 
mentators  and  enemies  have  attributed  to  him. 

This  error,  less  common  now  than  formerly,  con 
sisted  in  the  belief  that,  as  the  fixed  value  of  specie 
is  ideal,  and  is  useful  only  to  be  exchanged  for  sup 
plying  our  wants,  paper  money  also,  which  was 
equally  current  and  could  be  exchanged  for  bread, 
meat  and  clothing,  had  an  intrinsic  value  as  positive 
as  that  of  gold  or  silver.  But  Law  understood 
perfectly  well  that  specie  had  an  intrinsic  value 
which  paper  money  could  not  have;  that  coin 
melted  down  is  still  valuable  as  an  ingot,  while 
paper  is  worthless  when  it  ceases  to  be  a  note,  and 
that  this  intrinsic  value  of  the  precious  metals 
makes  them  the  most  certain  and  secure  medium 
of  exchange.  He  has  explained  precisely  his  opin- 


24  MEMOIR   OF   JOHN   LAW. 

ion,  on  this  subject,  in  a  pamphlet  still  in  existence ; 
but  he  thought  that  banks  could  impart  a  real 
value  to  paper.  In  effect,  the  notes  which  a  bank 
discounts  are  assignments  of  an  anticipated  product ; 
a  bank,  in  accepting  them  and  issuing  its  own  notes 
in  their  place,  guaranties  the  products.  If  it  mis 
calculates,  its  capital  is  responsible.  It  is  an  in 
surance  fund  against  its  mistakes.  Paper  money 
thus  acquires,  by  means  of  banks,  the  actual  value 
of  gold.  It  was  upon  these  conditions,  and  these 
alone,  that  Law  thought  paper  money  preferable  to 
specie. 

By  comparing  the  results  of  his  observations  in 
the  different  countries  of  Europe,  his  views  were 
remarkably  expanded,  and  he  had  conceived  the 
vastest  system  of  credit  that  had  ever  been  imagined. 
He  had  observed  that  the  capitals  of  some  great 
countries  had  banks,  as  at  London  and  Amsterdam, 
but  that  the  provinces  in  England  and  Holland  did 
not  participate  in  the  advantages  of  this  system  of 
credit. 

He  thought  that  by  establishing  a  general  bank, 
which  should  have  its  branches  in  second-rate  cities, 
the  advantages  of  paper  money  would  be  extended 
throughout  an  empire,  even  to  the  small  towns  and 
villages. 

If  a  bank  at  the  capital,  with  a  hundred  million 


A  NATIONAL  BANK.  25 

francs  in  specie,  could  issue  two  hundred  millions  in 
bills,  the  general  bank  which  he  had  planned  could, 
he  thought,  in  a  country  which  had  a  thousand  mil 
lion  francs  in  coin,  issue  two  thousand  millions  in  s 
bills,  and  thus  triple  the  facilities  of  exchange.  In 
this  way,  the  bills  being  sufficient  for  the  principal 
circulation,  all  the  coin  of  the  country  would  be  a 
specie  reserve,  except  what  was  necessary  for  small 
change.  This  project  was  well  planned  and  very 
practicable.  Only  Law  exaggerated  the  possible 
extent  of  the  use  of  paper  money,  and  had  too  much 
confidence  in  the  ease  with  which  it  might  be  put 
in  circulation  in  remote  districts. 

Law  would  have  a  bank  of  such  importance  a 
public  institution,  and  the  provincial  treasuries  for 
its  corresponding  branches.  These  principles  stated, 
he  deduced  from  them  immense  consequences.  In 
the  first  place,  most  governments  leased  the  collec 
tion  of  their  revenue  to  companies  of  men  called 
farmers  of  the  revenue,  who  reaped  therefrom  con 
siderable  profits,  and  inflicted  outrageous  vexations 
upon  the  taxpayers. 

The  collection  of  the  revenue  could  be  confided 
to  the  general  bank,  and  the  profits  therefrom  saved 
to  the  state.  The  payment  of  the  public  expenses 
could  also  be  made  by  the  bank,  through  its  corres 
pondence  with  its  branches.  It  would  thus  have 

2 


26  MEMOIR   OF   JOHN   LAW. 

the  management  of  all  the  public  money.  The 
farmers  of  the  revenue,  to  whom  was  leased  the  im 
post  duty,  exacted  a  usurious  interest  of  the  state 
when  it  needed  any  advances.  The  new  bank 
would  discount  the  impost  as  it  discounted  bills  of 
exchange  ;  it  would  be  possible  for  it  to  do  this  at 
a  still  more  moderate  charge,  as  in  augmenting  the 
amount  of  specie  it  would  itself  have  contributed 
to  reduce  the  interest  on  money.  It  could  also  be 
intrusted  with  the  care  of  the  loans,  and,  in  this 
particular,  avoid  the  extortions  of  the  usurers.  This 
is  not  all ;  the  system  of  monopolies  being  generally 
practised  in  Europe,  and  the  greater  part  of  the 
commerce  with  remote  parts  of  the  world  being 
carried  on  by  chartered  companies,  to  whom  gov- 
,  ernment  gave,  on  certain  conditions,  exclusive  privi 
leges,  this  same  general  bank  could  have  the  privi 
leges  of  special  lucrative  commerce,  and  join  to  its 
numerous  attributes  that  of  trade.  Combining  thus 
the  profits  of  a  bank  of  discount  with  those  of  the 
administration  of  the  public  revenue  and  those  of 
its  commerce  as  a  privileged  company,  it  would  ne 
cessarily  have  an  immense  capital,  which  it  would 
distribute  in  shares  among  which  would  be  divided 
its  profits.  In  this  manner  it  would  offer  its  notes 
to  those  who  desired  a  circulating  medium,  and  its 
shares  to  those  who  sought  a  profitable  investment. 


PLAN    OF    A   BANK   FOK    SCOTLAND.  27 

Such  is  the  ingenious  and  efficient  system  con 
ceived  by  Law,  which  united  and  placed  on  the 
same  basis  both  public  and  private  credit ;  which 
reduced  the  different  methods  of  making  payments, 
which,  before  then,  were  slow,  laborious  and  com 
plicated,  into  one  only ;  which  furnished  coin  for  the 
payment  of  small  sums,  and  bank-notes  for  that  of 
large ;  which  multiplied  capital  by  simplifying  the 
currency;  which  reduced  thenceforth  the  in 
terest  on  money,  and  added  to  the  introduction 
of  an  abundant  and  convenient  currency  the 
creation  of  a  means  of  investment  at  once  sure  and 
profitable. 

Even  at  the  present  day  we  except  from  this  sys 
tem  only  the  leasing  of  the  collection  of  the  public 
revenues,  which  is  no  longer  permitted,  and  the 
monopolies,  which  were  required  at  that  time,  as 
companies  with  extraordinary  powers  were  neces 
sary  to  penetrate  unexplored  and  unfrequented 
parts  of  the  world. 

Full  of  these  views,  Law  presented  a  plan  adapted 
to  the  wants  of  his  own  country  about  the  year 
1700.  This  plan  was  to  constitute  a  company  with 
power  to  collect  the  public  revenue,  •  to  carry  on 
certain  kinds  of  commerce  with  exclusive  privileges, 
to  direct  manufactures,  certain  commercial  en 
terprises,  the  fisheries,  etc.  His  plan,  although 


20  MEMOIR  OF  JOHN   LAW. 

rejected,  attracted  public  attention  to  him,  and 
brought  him  in  contact  with  the  principal  persons 
in  Scotland. 

In  1705  it  was  proposed  to  establish  a  territorial 
bank.  Law  offered  a  well-digested  plan  for  one,  in 
a  very  curious  pamphlet  entitled,  "  Considerations 
upon  Hard  Money."  Aside  from  the  error  which 
we  have  mentioned,  and  which  was  disposed  to  at 
tribute  the  prosperity  of  states  exclusively  to  the 
abundance  of  money,  the  means  of  increasing  this 
abundance  by  banks  are  clearly  explained,  and  with 
an  understanding  of  the  subject  very  uncommon 
at  that  time.  This  new  plan  of  Law  was  no  better 
received  than  the  first.  It  was  rejected,  from  the 
apprehension,  it  was  said,  of  giving  too  much  power 
to  the  court.  (NOTE  2.) 


NOTES  TO  CHAPTER  I. 

(1.)   LAW'S   DUEL   AND  ITS   CONSEQUENCES. 

A  MRS.  LAWRENCE  was  the  occasion  of  a  quarrel 
between  him  and  Mr.  Edward  Wilson,  fifth  son  of 
Thomas  Wilson  of  Keythorpe,  in  the  County  of 
Leicester,  which  led  to  a  hostile  meeting  betwixt 
the  parties  in  Bloomsbury  Square,  9th  April,  1694, 
when  Mr.  Wilson  was  killed  on  the  spot. 

Mr.  Law  was  immediately  apprehended,  and  was 
brought  to  trial  before  the  King  and  Queen's  Com 
missioners,  who  sat  at  the  Justice  Hall  in  the  Old 
Bailey,  on  the  18th,  19th  and  20th  of  April,  1694. 
In  the  proceedings  published  by  authority,  the 
statement  is  thus  given  :  John  Law,  of  St.  Giles's-in- 
the  Fields,  gentleman,  was  arraigned  upon  an  indict 
ment  for  murder,  for  killing  Edward  Wilson,  gentle 
man,  commonly  called  Beau  Wilson,  a  person  who, 
by  the  common  report  of  fame,  kept  a  coach  and 
six  horses,  maintained  his  family  in  great  splendor 
and  grandeur,  being  full  of  money — no  one  com 
plaining  of  his  being  their  debtor,  yet  from  whence 


30  MEMOIR   OF   JOHN   LAW. 

he  had  the  effects  which  caused  him  to  appear  in  so 
great  an  equipage  is  hard  to  be  determined.  The 
matter-of-fact  was  this :  some  difference  happened 
to  arise  between  Mr.  Law  and  the  deceased  con 
cerning  a  Mrs.  Lawrence,  who  was  acquainted  with 
Mr.  Law ;  upon  which,  on  the  9th  of  April  instant, 
they  met  in  Bloomsbury  Square,  and  there  fought 
a  duel,  in  which  Mr.  Wilson  was  killed.  It  was 
made  appear  also  that  they  had  met  several  times 
before,  but  had  not  opportunity  to  fight;  beside, 
there  were  several  letters  sent  by  Mr.  Law,  or  given 
to  Mr.  Wilson  by  him,  which  letters  were  full  of 
invectives  and  cautions  to  Mr.  Wilson  to  beware, 
for  there  was  a  design  of  evil  against  him;  and 
there  were  two  letters  sent  by  Mr.  Wilson,  one  to 
Mr.  Law,  and  the  other  to  Mrs.  Lawrence.  Mr. 
Wilson's  man,  Smith,  swore  that  Mr.  Law  came  to 
his  master's  house,  a  little  before  the  fatal  meeting, 
and  drank  a  pint  of  sack  in  the  parlor ;  after  which, 
he  heard  his  master  say,  that  he  was  much  surprised 
with  something  that  Mr.  Law  had  told  him.  Cap 
tain  Wightrnan,  a  person  of  good  information,  gave 
an  account  of  the  whole  matter.  He  said  that  he 
was  a  familiar  friend  of  Mr.  Wilson — was  with  him 
and  Mr.  Law  at  the  Fountain  Tavern  in  the  Strand, 
and  after  they  had  stayed  a  little  while  there  Mr. 
Law  went  away.  After  this,  Mr.  Wilson  and  Cap- 


LAW'S    DEFENCE.  31 

tain  Wightman  took  coach  and  were  driven* 
toward  Bloomsbury,  where  Mr.  Wilson  stepped  out 
of  the  coach  into  the  square,  where  Mr.  Law  met 
him ;  and  before  they  came  together,  Mr.  Wilson 
drew  his  sword  and  stood  upon  his  guard.  Upon 
which  Mr.  Law  immediately  drew  his  sword  and 
they  both  passed  together,  making  but  one  pass,  by 
which  Mr.  Wilson  received  a  mortal  wound  in  the 
upper  part  of  the  stomach,  of  the  depth  of  two 
inches,  of  which  he  instantly  died.  The  letters 
read  in  court,  were  full  of  aggravations  on  both 
parts,  without  any  name  subscribed  to  them.  There 
were  other  witnesses  that  saw  the  duel  fought,  who 
all  agreed  in  their  depositions  that  they  drew  their 
swords,  and  passed  at  each  other,  and  presently  Mr. 
Wilson  was  killed.  This  was  the  sum  of  the  evi- 
4ence  for  the  crown. 

Mr.  Law,  in  his  defence,  declared  that  Mr.  Wil 
son  and  he  had  been  together  several  times  before 
the  duel  was  fought,  and  no  quarrel  ever  took  place 
between  them  till  they  met  at  the  Fountain  Tavern, 
which  was  occasioned  about  the  letters ;  and  that 
his  meeting  with  Mr.  Wilson  in  Bloomsbury  was 
merely  an  accidental  thing,  Mr.  Wilson  drawing 
his  sword  upon  him  first,  by  which  he  was  forced 
to  stand  in  his  own  defence — that  the  misfortune 
did  arise  only  from  a  sudden  heat  of  passion,  and 


32  MEMOIR   OF   JOHN   LAW. 

'not  from  any  malice  prepense.  The  court  acquainted 
the  jury,  that  if  they  found  Mr.  Law  and  Mr.  Wil 
son  did  make  an  agreement  to  fight,  though  Mr. 
Wilson  drew  first,  that  Mr.  Law  killed  him,  he  was 
by  the  construction  of  the  law  guilty  of  murder ; 
for  if  two  men  suddenly  quarrel,  and  one  kill  the 
other,  this  would  be  but  manslaughter:  but  this 
case  seems  to  be  otherwise,  for  there  was  a  contin 
ual  quarrel  carried  on  betwixt  them  for  some  time 
before ;  therefore,  must  be  accounted  a  malicious 
quarrel,  and  a  design  of  murder  in  the  person  that 
killed  the  other. 

The  trial  lasted  long  and  the  prisoner  had  persons 
of  good  quality  who  gave  a  fair  account  of  his  life 
in  general,  and  that  he  was  not  given  to  quarrelling, 
nor  a  person  of  ill  behavior.  The  jury  having  con 
sidered  of  a  verdict  very  seriously,  found  that 
Mr.  Law  was  guilty  of  murder,  and  sentence  of 
death  was  passed  on  him,  20th  April,  1694. — 
WOOD. 

In  the  London  Gazette  of  Monday,  Tth  January, 
1695,  a  reward  of  fifty  pounds  was  offered  for  the 
apprehension  of  Capt.  John  Law,  a  Scotchman, 
lately  a  prisoner  in  the  King's  Bench,  for  murther  ; 
who  is  described  as  "  a  very  tall,  black,  lean  man, 
well  shaped,  above  six  foot  high,  large  pock-holes 


TEEEITOErAL   BANK.  33 

£ 

in  his  face,  big,  high  nosed,  speaks  broad  and 
loud."  This  description,  which  conveys  no  very- 
favorable  idea  of  Law's  personal  appearance,  and 
differs  from  his  real  portrait,  is  supposed  by 
Mr.  Wood  to  have  been  drawn  up  with  a  view  to 
facilitate  his  escape.  The  prefix  of  captain,  which 
is  otherwise  a  good  travelling  title,  may  also  per 
haps  be  explained  on  the  same  hypothesis. — Ency 
clopedia  J3ritanniea. 

(2.)   LAW'S  TEEEITOEIAL  BANK. 

Law's  proposal  for  a  territorial  bank  was,  thai 
commissioners,  to  be  appointed  by  an  act,  under  the 
control  of  Parliament,  should  be  empowered  to 
issue  notes,  either  in  the  way  of  loan,  at  ordinary 
interest,  or  upon  landed  security ;  the  debt  not, 
however,  to  exceed  half,  or  at  most,  two-thirds  of 
the  value  of  the  land,  or  upon  land  pledges,  redeem 
able  within  a  certain  period,  to  the  full  value  of  the 
land ;  or  lastly  upon  the  sale  irredeemably  to  the 
amount  of  the  price  agreed  upon.  Paper  money 
thus  issued  and  secured  would,  he  conceived,  be 
equal  in  value  to  gold  and  silver  money  of  the  same 
denomination,  and  might  even  be  preferred  to  these 
metals  as  not  being  like  them  liable  to  fall  in 

value. — Encyclopedia  Britannica. 

2* 


CHAPTER  II. 

Law  resumes  his  travels— His  success  at  the  gaming-table— Pro 
poses  his  system  to  various  governments — State  of  the  French 
finances — Measures  of  the  Regent— Debasing  the  coin — Its  effect 
— Law  offers  his  plans — Objections  raised  to  it — Establishment 
of  Law's  private  bank — Its  favorable  reception  by  the  people — 
Its  benefit  to  trade — Its  extension  into  the  provinces — Astonish 
ing  success. 


CHAPTEB  n. 

THEREUPON,  Law  left  home  and  recommenced  his 
travels,  either  to  gain  more  knowledge  or  to  present 
his  system  acceptably  to  some  of  the  principal  states 
on  the  Continent,  ruined  by  the  wars  of  Louis  XIV., 
and  very  ignorant  in  all  matters  connected  with 
credit.  He  went  to  Brussels,  and  from  Brussels  to 
Paris.  He  gave  himself  up  to  gaming  at  the  latter 
capital,  and,  thanks  to  his  genius  for  calculation,  he 
won  large  sums.  He  held  the  faro  bank  at  the 
house  of  Duclos,  a  celebrated  courtesan  of  that 
period,  and  never  commenced  playing  without  a 
hundred  thousand  francs. 

He  even  had  made  some  gold  counters,  worth 
eighteen  louis,  for  greater  convenience  in  counting. 
He  established  relations  with  several  gentlemen  of 
the  court,  and,  above  all,  with  the  Duke  of  Orleans, 
who  liked  inventive  minds,  and  was  disposed  to 
adopt  his  views.  It  was  at  the  time  of  the  war  of 
the  succession.  Chamillart,  overcome  by  the  bur 
den  of  the  finances,  was  ready  to  resign  the  charge 
of  them.  Law  offered  his  plans,  but  no  one  was  in 

81 


38  MEMOIR    OF   JOHN    LAW. 

a  condition  to  comprehend  them  ;  besides,  he  was  a 
Protestant,  and  Louis  XIY.  would  not  listen  to  him. 
Soon,  even,  suspicions  were  excited  concerning  the 
stranger,  who  displayed  the  greatest  luxury,  and 
won  large  sums  from  the  courtiers ;  and  the  inten- 
dant  of  the  police,  M.  d'Argenson,  sent  an  order  to 
Law  requiring  him  to  leave  Paris  within  twenty- 
four  hours.  Law  repaired  to  Italy,  and  continued 
to  game,  whether  at  Genoa  or  at  Yenice,  and  won 
immense  sums.  He  then  went  to  Turin,  where  he 
lent  money  to  the  famous  Yendome,  and  succeeded 
in  having  himself  presented  to  Yictor  Ame'de'e,  to 
whom  he  proposed  his  system  of  finance.  Amedee 
replied  that  the  system  was  not  adapted  to  a  coun 
try  in  the  midst  of  the  Alps,  and  dismissed  him,  ad 
vising  him  to  take  his  plans  to  France  or  Germany. 
The  Emperor  was  then  occupied  in  establish 
ing  a  bank.  Law  hastened  to  submit  his  views 
to  him :  succeeded  no  better  than  with  the  other 
princes  to  whom  he  had  presented  them,  and  again 
returned  to  his  own  country.  It  was  said  that  the 
sums  which  he  had  won  at  the  gaming  table 
amounted  to  two  millions.  He  transferred  these 
two  millions  to  France,  and  prepared  to  return  there 
himself.  The  death  of  Louis  XIY.,  the  accession 
to  power  of  the  Duke  of  Orleans,  and  the  deplorable 
state  of  the  French  finances,  made  him  hope  that,  at 


FINANCIAL    CONDITION    OF   FRANCE.  39 

last,  lie  should  find  a  country  disposed  to  adopt  his 
measures. 

The  old  king  had  just  expired,  in  1715.     The 
war  of  the   succession  was   ended.     During  this 
ruinous  war,  Demarest,  who  had  succeeded  Chamil- 
lart,  had  had  recourse  to  all  expedients  for  raising 
money.     He  had  frequently  renewed  the  forms  of 
the  mortgages  on  the  treasury,  in  order  to  revive 
the   confidence   of    the  usurers.      He  had  issued 
government  stocks  under  every  name  and  form,  in 
order  to  give  them  a  little  credit ;  but  these  expe 
dients  were  exhausted,  and  the  royal  stocks  were  at 
a  discount  of  from  70  to  80  per  cent.    Demarest  pre 
sented,  on  the  20th  of  September,  a  desperate  report 
for  the  year,  of  which  the  following  is  the  substance : 
expenses,   148  millions;   receipts   anticipated,   ex 
cept  3  millions ;  710  millions  of  royal  stocks  pay 
able    during  the    current    year;    whole    districts 
depopulated,  commerce  ruined,  troops  unpaid  and 
ready  to  revolt.     In  this  extremity,  bankruptcy  was 
proposed  to  the  regent.     It  was  urged  that  a  sove 
reign  is  not  surety  for   the  blunders  of  his   pre 
decessors,  and  that  a  severe  example  would  render 
capitalists  less  ready   to  lend  themselves  to  the 
caprices   of    a    spendthrift  ruler.      The   courtiers, 
who  hoped  that  the  relief  of  the  treasury  would 
permit  a  renewal  of  favors  to  them,  insisted  upon 


40  MEMOIR   OF   JOHN   LAW. 

bankruptcy.  The  regent  spurned  so  unworthy  an 
expedient,  and  held  himself  bound  by  the  engage 
ments  of  the  late  king.  He  also  refused  to  give  a 
forced  credit  to  stocks  already  due,  for  that  would 
create  a  paper  money  discredited  in  advance. 
(NOTE  1.) 

He  first  set  himself  about  paying  the  troops,  and 
the  arrearages  due  on  some  annuities.  In  order  to 
procure  the  means,  he  ordered  the  revenue  of  the 
year  to  be  paid  into  the  treasury  although  pre 
viously  mortgaged.  This  was  certainly  a  partial 
bankruptcy,  but  it  was  inevitable.  He  ordered  the 
reduction  of  many  annuities,  and  of  almost  all  those 
which  were  at  an  exorbitant  interest;  he  ordered 
that  the  stocks  already  due  should  be  revised  and 
reduced,  and  then  be  converted  into  250  millions  o£ 
notes,  in  one  form  called  national  notes,  successively 
redeemable  and  bearing  an  interest  of  4  per  cent. ; 
he  established  a  court  for  the  purpose  of  prosecut 
ing  and  fining  the  brokers  who  had  made  disreput 
able  fortunes  by  their  traffic  in  these  securities.  At 
that  time,  governments  used  to  take  such  high 
handed  measures ;  pressed  by  imperative  necessity, 
they  would  yield  to  the  hard  conditions  which 
the  usurers  imposed  upon  them ;  but,  the  time  of 
distress  once  passed,  they  took  back,  by  force,  that 
which  the  usurer  had  wrung  from  them  by  extortion. 


MEASURES   OF   THE   KEGENT.  4:1 

We  see  that  the  regent,  without  consenting  to  a 
general  and  absolute  bankruptcy,  had  recourse  to 
partial  nonpayments,  depending  upon  the  import 
ance  and  character  of  the  debts.  , 

As  it  was  impossible  to  fulfill  all  the  obligations 
contracted  in  the  last  reign,  he  endeavored  to  make 
the  necessary  distinctions  between  them  as  just  as 
possible  ;  and  reducing  some  and  postponing  others, 
he  failed  to  meet  only  the  engagements  which  were 
impracticable.  Among  the  measures  which  he 
adopted,  there  was  one,  however,  as  dishonest  as  it 
was  impolitic :  this  was  changing  the  value  of  the 
coin.  The  practice  of  resorting  to  this  measure, 
which  prevailed  at  that  period,  is  the  only  excuse 
for  the  regent. 

Governments,  for  several  centuries,  forgetting 
that  the  value  of  bullion  did  not  depend  upon 
their  decrees,  but  upon  commerce,  recoined  money, 
raised  it  to  a  fictitious  nominal  value,  and 
poured  it  into  circulation  at  a  price  very 
much  greater  than  its  actual  value.  But  these 
expedients  served  only  to  create  a  financial 
derangement,  without  any  real  advantage  to  the 
government. 

The  overvalued  denomination  of  coins  added 
nothing  to  their  real  worth ;  the  price  of  every 
thing  rose  in  proportion,  and  the  same  amount  of 


4:2  MEMOIR    OF   JOHN   LAW. 

gold  and  silver  was  always  necessary  to  purchase 
the  same  articles.  No  one  suffered  by  the  wrong 
except  such  creditors  as  were  compelled  by  pre 
vious  contracts  to  receive  specie  at  its  nominal 
value.  The  government  realized  scarcely  any 
benefit  from  the  fraud,  because  counterfeiters 
recoined  money  themselves,  and  thus  made  the 
profit  which  the  reduction  in  the  weight  of  coin 
offered  them.  This  crime,  called  uttering  de 
based  coin,  was  punished  by  the  severest  pen 
alties,  in  vain.  The  regent  commanded  that  the 
thousand  millions  then  in  circulation  in  France 
should  be  converted  into  twelve  hundred  millions. 
The  government  ought  thus  to  have  realized  a  pro 
fit  of  two  hundred  millions,  as  it  issued  twelve  for 
every  ten  required.  But  only  a  small  part  of  the 
thousand  millions  found  its  way  to  the  mint ;  the 
Dutch  and  the  counterfeiters  made  most  of  the  il 
legitimate  profit. 

But,  notwithstanding  these  measures,  the  difficul 
ties  were  only  postponed.  The  annual  interest  on 
the  debt,  reduced  and  readjusted,  still  amounted  to 
eighty  millions — that  is  to  say,  to  about  one-half  the 
revenue.  The  royal  stocks,  converted  into  two  hun 
dred  and  fifty  millions  of  national  scrip,  continued 
to  be  at  a  discount  of  from  seventy  to  eighty  per 
cent.  Public  and  private  credit  were  annihilated. 


The  regent,  who  wished  to  test  the  presbysynodic 
system  of  the  Abbe  St.  Pierre,  and  divide  the  ad 
ministration  of  government  among  several  coun 
cils,  had  placed  the  Duke  of  ISToailles  at  the  head  oi 
the  Council  of  Finance.  The  Duke  proposed  some 
very  wise  but  very  slow  plans  of  economy.  The 
exigencies  of  the  situation  demanded  means  for 
more  speedy  extrication  from  the  immediate  diffi 
culties.  It  was  at  this  moment  that  Law  presented 
his  system.  Law  by  no  means  despaired  of  France; 
the  most  fertile  and  most  thickly  populated  country 
in  Europe,  as  well  as  the  most  industrious.  Al| 
though  in  a  desperate  situation  for  the  moment] 
this  beautiful  kingdom  still  had  three  times  thj 
revenue  of  England.  In  order  to  revive  industry! 
and  relieve  the  oppressions  under  which  it  was  readj 
to  succumb,  it  was  only  necessary,  according  t4 
Law,  to  reestablish  confidence  and  a  sound  cur 
rency  by  means  of  a  good  system  of  credit. 

The  genius  and  enterprising  spirit  of  the  peoplfr 
rendered  them  peculiarly  fit  to  adopt  a  new  ani 
grand  theory.  Eepulsed  by  the  late  king,  Laf 
flattered  himself  that  he  should  be  well  received  ty 
the  regent.  The  Duke  of  Orleans  was  gifted  wit[i 
a  keen,  bold  spirit ;  a  foe  to  the  prejudices  froiji 
which  he  had  suffered  oppression  in  his  youth,  lie 
had  devoted  himself  to  the  study  of  the  natural 


I 

14  MEMOIR   OF   JOHN   LAW. 

sciences,  of  chemistry  and  of  alchemy,  to  such 
an  extent  even  as  to  be  accused  of  complicity 
with  poisoners.  He  had  studied,  above  all,  the 
principles  of  government.  He  knew  Law,  ap 
preciated  his  genius,  was  pleased  with  his  per- 
ion,  and  admired  his  theories.  A  system,  the  prin 
ciples  of  which  were  sound  in  part,  and  which 
could  do  no  harm  except  by  a  misapplication 
<>f  those  principles,  was  certain  to  catch  the  adven 
turous  spirit  of  the  prince,  and  it  had  completely 
seduced  him.  The  increasing  independence  of 
thought,  the  taste  for  novelty,  the  license  of  man- 
rers,  results  of  a  too  sudden  emancipation  from  a 
too  rigid  constraint,  signally  favored  the  experiment 
vliich  was  to  change  for  a  moment,  the  face  of  France. 
Law  did  not  propose  any  half-way  measures.  He 
offered  his  project  entire;  that  is  to  say,  a  bank 
•which  should  discount,  should  collect  the  national 
revenues,  should  carry  on  commercial  monopolies, 
aid  afford,  at  the  same  time,  a  plentiful  circulation 
o*  paper  money  and  a  means  of  profitable  invest 
ment.  The  council  of  finance,  composed  of  saga 
cious  but  timid  men,  did  not  comprehend  the  pro 
ject  of  Law,  or  were  frightened  by  it,  and  decided 
tc  reject  it.  Law  then  reduced  the  extent  of  his 
plans.  He  proposed  simply  a  bank  of  discount,  and 
eyen  offered  to  establish  it  at  his  own  expense.  He 


OPPOSITION   TO   LAW'S   BANK.  45 

presented  several  memorials  on  the  subject,  which 
contain  little  to  instruct  us  to-day,  yet  they  are 
models  of  reasoning.  He  maintained  that  a  bank 
would  increase  the  currency  by  the  issue  of  its 
notes,  would  render  the  remittances  from  one  pro 
vince  to  another  more  convenient,  would  reestablish 
confidence  by  the  creation  of  money  of  a  fixed 
value — bank  money  y  would  permit  foreigners  to 
make  their  contracts  in  France  with  a  basis  of 
fixed  and  certain  value,  and  would  contribute  by 
all  these  means  to  the  restoration  of  public  and  pri 
vate  credit.  Law  wished  to  make  this  experiment 
at  his  own  risk  and  peril,  and  offered  his  property 
as  a  guaranty  against  any  loss  which  might  result. 

A  member  of  the  Parliament  of  Paris,  discussing 
Law's  project,  raised  some  objections  to  it,  which 
it  is  interesting  to  recall,  as  illustrating  the  history 
of  the  stagnating  influence  of  routine.  Among 
other  inconveniences,  he  insisted  that  a  bank  could 
not  redeem  its  notes  if  everybody  should  wish  to 
realize  them  at  the  same  time ;  its  treasury  would 
tempt  the  rapacity  of  government ;  and,  last  of  all, 
that  its  bills  would  incur  a  danger  which  attaches 
to  paper,  viz.  that  of  being  more  easily  lost,  stolen, 
or  burned  than  specie.  This  shows  what  sort  of 
financiers  Law  had  to  do  with.  He  answered  these 
objections,  and  succeeded  in  convincing  the  regent 


46  MEMOIR   OF   JOHN   LAW. 

His  plan  of  a  bank  of  discount  was  adopted,  and  lie 
was  authorized  to  establish  one  at  his  own  expense. 
The  charter  was  issued  by  an  edict  of  the  second  of 
May,  1716.  The  capital  was  fixed  at  six  millions 
of  francs,  and  was  divided  into  twelve  hundred 
shares  of  five  thousand  francs  each.  He  was 
authorized  to  discount  bills  of  exchange,  to  keep 
accounts  with  merchants,  by  means  of  what  was 
then  called  a  "  bank  clearing,"  and  to  issue  notes 
payable  to  bearer  in  coin  (so  said  the  edict)  of  the 
weight  and  denomination  of  that  day.  Thanks  to 
this  last  clause,  the  variations  in  the  value  of  money 
were  no  more  to  be  feared  by  those  who  should  stipu 
late  for  bank  money,  since  they  were  certain,  thus 
to  contract  according  to  the  rates  of  coin  on  the  2d 
day  of  May,  1716.  Beside,  this  guaranty  offered  to 
foreigners,  there  was  another  assured  them ;  the  notes 
of  the  bank  and  the  amounts  on  deposit  were  exempt 
ed  from  the  right  of  confiscation.  The  offices  were 
of,  and  in,  the  house  of  Law.  The  Duke  of  Orleans 
accepted  the  title  of  patron  of  the  new  institution. 
(NOTES  2  and  3.) 

Everything  at  this  time  made  the  necessity  of  a 
bank  of  discount  apparent,  whether  it  was  the  high 
rates  for  money,  or  the  uncertainty  in  the  value  of 
coin.  Thus  the  establishment  of  Law  could  not  fail 
to  succeed.  The  government  was  the  first  to  make 


4:7 


use  of  the'  notes ;  it  received  and  disbursed  them. 
The  holders  of  the  bills  having  found  the  greatest 
facility  in  realizing  them  at  the  bank,  acquired  con 
fidence  and  diffused  it.  People  began  to  be  proud 
of  this  paper,  so  readily  converted  into  specie,  and 
were  glad  to  make  use  of  it,  on  account  of  the 
promptness  of  payments  which  it  introduced.  It 
had,  moreover,  an  advantage  very  much  felt :  that 
was,  its  redemption  in  coin  of  a  fixed  value.  The 
constant  variation  in  the  price  of  coin  rendered  it 
uncertain  upon  what  basis  a  contract  was  made. 
By  stipulating  for  bank  notes,  it  was  certain  that 
the  contract  was  payable  in  coin  of  the  weight  and 
denomination  of  the  second  May,  1Y16.  (NOTE  4.) 
This  was  a  powerful  reason  for  everybody  to  cori- 
tr,act  with  that  stipulation,  and  even  to  deposit  their 
specie  at  the  bank  to  obtain  the  notes.  Foreigners, 
who  had  not  dared  to  trade  any  more  with  Paris,  on 
account  of  the  uncertainty  of  values,  also  contracted 
for  bank  notes,  and  resumed  the  current  of  their 
business  with  France. 

The  circulation  thus,  by  degrees,  became  estab 
lished.  The  moderate  charge  for  discount  also  had 
a  most  beneficial  influence.  Usury  diminished ; 
credit  revived.  On  the  whole,  at  the  end  of  one 
year,  all  the  results  predicted  by  Law  were,  for  the 
most  part,  accomplished. 


4:8  MEMOIR   OF   JOHN   LAW. 

These  fortunate  beginnings  secured  for  him  the 
favor  of  the  public  and  the  entire  confidence  of  the 
regent.  Soon  this  prince  gave  himself  up  entirely 
to  the  Scotch  financier,  and  wished  to  procure  him 
the  means  of  putting  all  his  plans  in  execution. 

The  first  thing  to  do  was  to  extend  the  connec 
tions  of  the  bank  and  introduce  its  notes  into  the 
provinces,  in  order  to  change  it  from  a  special  to  a 
general  bank.  To  accomplish  this  it  was  necessary 
that  the  notes  sent  into  the  provinces  should  there 
be  converted  into  specie,  or  should  be  found  of  suffi 
cient  use  to  be  retained  there.  It  was  this  which 
was  effected  by  the  edict  of  10th  April,  1717,  given 
one  year  after  the  establishment  of  the  bank.  By 
virtue  of  this  edict,  the  notes  could  be  given  in  pay 
ment  of  duties,  and  the  farmers  of  the  revenue  and 
their  subordinates,  the  receivers,  etc.,  in  a  word,  all 
the  officers  of  the  government  treasury,  were 
ordered  to  give  receipts  for  their  value  in  specie 
whenever  they  were  presented.  This  was  the  best 
method  of  aiding  the  general  bank,  since  the  notes 
sent  into  the  provinces  could  be  used  there  for  the 
payment  of  taxes,  or  would  be  at  once  converted 
into  specie.  From  this  moment  the  bank  notes 
were  employed  for  all  remittances  from  Paris  to  the 
provinces,  and  from  the  provinces  to  Paris. 

It  became  useless  to  transport  specie,  for  all  of 


CIRCULATION    OF   THE   NOTES.  4:9 

that  which  used  to  circulate  from  town  to  town  was 
deposited  either  at  the  bank  or  the  public  treasuries, 
and  exchanged  for  bank-notes,  which  were  trans 
mitted  in  their  place.  In  this  manner  the  general 
reserved  fund  of  the  bank  was  likely  to  be  increased 
by  all  the  specie  which  its  notes  would  displace, 
and  Law  saw  himself  on  the  point  of  realizing  his 
project  of  a  vast  banking  establishment,  having  for 
a  reserved  fund  all  the  specie  of  the  country.  The 
expenses  of  transportation  were  saved,  circulation 
was  accelerated,  and  Law  had  devised  a  very  simple 
means  of  rendering  it  more  safe;  it  was  to  have 
the  notes  indorsed  by  those  who  sent  them,  the 
indorsement  not  to  operate  at  all  as  a  guaranty. 
This  precaution  prevented  loss  or  theft,  for  the 
finder,  or  thief,  could  not  use  them.  They  imme 
diately  began  to  circulate  throughout  France  in 
considerable  sums.  They  were  returned  to  the 
treasuries  at  Paris,  covered  with  indorsements,  and 
were  immediately  destroyed  to  be  replaced  by 
others. 

The  success  of  this  bank  was  soon  astonishing. 
With  a  capital  of  "only  six  millions,  it  would  issue 
fifty  or  sixty  millions  of  notes,  without  confidence 
in  it  being  in  the  slightest  degree  shaken.  On  the 
contrary,  the  demand  for  the  notes  increased  every 

day,  and  the  deposits  of  gold  and  silver  increased 

8 


50  MEMOLR    OF   JOHN   LAW. 

perceptibly.  If  Law  had  devoted  himself  entirely 
to  this  institution,  he  would  be  considered  one  of 
the  benefactors  of  our  country,  and  the  originator 
of  a  magnificent  system  of  credit :  but  his  impetu 
ous  nature,  joined  to  that  of  the  people  among 
whom  he  operated,  brought  about,  in  a  short  time,  a 
gigantic  and  disastrous  imitation. 

Law  was  now  on  the  high  road  to  fortune.  The 
study  of  thirty  years  was  brought  to  guide  him  in 
the  management  of  his  bank.  He  made  all  his 
notes  payable  at  sight,  and  in  the  coin  current  at 
the  time  they  were  issued.  This  last  was  a  master 
stroke  of  policy,  and  immediately  rendered  his  notes 
more  valuable  than  the  precious  metals.  The  lat 
ter  were  constantly  liable  to  depreciation  by  the  un 
wise  tampering  of  the  government.  A  thousand 
livres  of  silver  might  be  worth  their  nominal  value 
one  day  and  be  reduced  one-sixth  the  next,  but  a 
note  of  Law's  bank  retained  its  original  value.  He 
publicly  declared,  at  the  same  time,  that  a  banker 
deserved  death  if  he  made  issues  without  having 
sufficient  security  to  answer  all  demands.  The  con 
sequence  was,  that  his  notes  advanced  rapidly  in 
public  estimation,  and  were  received  at  one  per 
cent,  more  than  specie. 

It  was  not  long  before  the  trade  of  the  country 
felt  the  benefit.  Languishing  commerce  began  to 


BANK   NOTES    AT   A   PREMIUM.  51 

lift  up  her  head,  the  taxes  were  paid  with  greater 
regularity  and  less  murmuring ;  and  a  degree  of 
confidence  was  established  that  could  not  fail,  if  it 
continued,  to  become  still  more  advantageous.  In 
the  course  of  a  year,  Law's  notes  rose  to  fifteen  per 
cent,  premium,  while  the  billets  d'etat,  or  notes 
issued  by  the  government  as  security  for  the  debts 
contracted,  by  the  extravagance  of  Louis  XIY., 
were  at  a  discount  of  no  less  than  seventy-eight  and 
a  half  per  cent. 

The  comparison  was  so  greatly  in  favor  of  Law, 
as  to  attract  the  attention  of  the  whole  kingdom, 
and  his  credit  extended  itself  day  by  day — branches 
of  his  bank  were  almost  simultaneously  established 
at  Lyons,  Kochelle,  Tours,  Amiens,  and  Orleans. 


NOTES  TO   CHAPTEE  H. 

(1.)    FINANCIAL   CONDITION   OF  FRANCE. 

DURING  the  fourteen  last  years  of  Louis  XIY.'s 
reign,  the  expenses  had  absorbed  two  billions  eight 
hundred  millions  (francs) ;  the  actual  receipts  had 
been  only  eight  hundred  and  eighty  millions.  It 
was  necessary  to  borrow  about  two  billions  in  the 
money  of  that  time,  which  is  equal  to  about  three  or 
four  billions  of  our  money.  This  deficit  .had  been 
consolidated  in  various  ways,  so  that  when  the  king 
died  in  September,  1715,  there  were  arrears  of 
711  millions ;  the  deficit  of  the  current  year  was 
already  78  millions.  The  treasury  was  empty. 
People  in  several  provinces  refused  to  pay  taxes. 
As  to  the  public  distress,  it  is  sufficient  to  say  that 
great  numbers  died  during  the  ensuing  winter  in 
Paris  from  cold  and  famine. — COCHET. 

(2.)  In  the  midst  of  this  financial  confusion  Law 
appeared  upon  the  scene.  No  man  felt  more  deeply 
than  the  regent  the  deplorable  state  of  the  coun- 


ORGANIZATION   OF  LAW'S  BANK.  53 

try,  but  no  man  could  be  more  averse  to  putting 
his  shoulders  manfully  to  the  wheel.  He  disliked 
business,  he  signed  official  documents  without  pro 
per  examination,  and  trusted  to  others  what  he 
should  have  undertaken  himself.  The  cares  insepa 
rable  from  his  high  office  were  burdensome  to  him. 
He  saw  that  something  was  necessary  to  be  done ; 
but  he  lacked  the  energy  to  do  it,  and  had  not  vir 
tue  enough  to  sacrifice  his  ease  and  his  pleasures 
in  the  attempt.  No  wonder  that,  with  this  charac 
ter,  he  listened  favorably  to  the  mighty  projects, 
so  easy  of  execution,  of  the  clever  adventurer  whom 
he  had  formerly  known  and  whose  talents  he  appre 
ciated. — MACKAY. 

(3.)  All  persons  whatsoever,  to  be  at  liberty  to 
subscribe  for  as  many  shares  (in  Law's  bank)  as 
they  pleased,  and  it  was  declared  that  the  bank 
securities  belonging  to,  as  well  as  the  money  lodged 
in  it  by  foreigners,  should  not  be  subject  to  any 
confiscation  or  attachment  whatsoever,  even  in  case 
of  a  war  with  the  nations  to  which  the  proprietors  re 
spectively  belonged.  All  questions  to  be  determined 
by  plurality  of  votes,  those  possessing  from  five  to  ten 
shares  to  have  one  vote ;  from  ten  to  fifteen  shares  to 
have  two  votes,  and  so  on  in  proportion  ;  but  those 
who  had  less  than  five  shares  were  to  be  excluded 


54: 


MEMOIR   OP   JOHN    LAW. 


from  any  share  in  the  management.  The  accounts 
to  be  balanced  twice  a  year,  viz.,  from  the  15th  to 
the  20th  of  June,  and  from  the  15th  to  the  20th  of 
January.  Two  general  courts  to  be  held  yearly,  in 
which  the  state  of  the  company's  affairs  should  be 
discussed,  and  the  dividends  settled.  The  treasurer 
never  to  have  more  than  200,000  crowns,  nor  any 
of  the  cashiers  more  than  20,000  in  hand  at  a  time ; 
and  they  were,  'beside,  obliged  to  find  sufficient 
security  for  their  intromissions.  The  votes  to  be 
signed  by  the  director,  and  by  one  of  the  proprie 
tors,  and  to  be  revised  by  an  inspector  appointed  by 
the  regent.  The  bank  not  to  undertake  any  sort 
of  commerce  whatever,  nor  to  charge  itself  with  the 
execution  of  any  commissions ;  the  notes  to  be  all 
payable  at  sight,  and  no  money  to  be  allowed  to  be 
borrowed  by  the  bank  on  any  pretext  whatever. 
Various  regulations  were  added  of  less  importance 
and  too  long  to  be  enumerated  in  this  place. — 
WOOD. 

(4.)  The  terms  in  which  the  notes  of  the  General 
Bank  were  couched,  viz.,  "  The  bank  promises  to  pay 

to  the  bank  at  sight,  the  sum  of crowns,  in  coin 

of  the  weight  and  standard  of  this  day"  (of  the  date 
of  each  note),  "  value  received,"  effectually  guarded 
against  this  contingency.  Let  us  state,  by  way  of 


FIXED   VALUE   OF   THE   NOTES.  55 

example,  that  if  one  who  had  paid  in,  and  taken 
out  a  bank  note  for  1,000  livres  or  25  niarcs,  on  the 
2d  of  June  1716,  when  the  standard  of  the  specie 
was  settled  by  law  at  40  livres  the  marc,  wanted 
to  exchange  it  at  an  after  period  when  the  standard 
was  fixed  at  50  livres  the  marc,  he  would,  on  pre 
senting  his  note,  receive  25  marcs  or  1,250  livres. 
The  bank  was  in  like  manner  secured  from  suffer 
ing  if  the  reverse  took  place.  On  this  account,  as 
well  as  from  the  quickness  and  punctuality  of  the 
payments,  and  the  orders  given  to  the  officers  of  the 
revenue  in  all  parts  in  the  kingdom  to  receive  the 
paper,  without  discount,  in  payment  of  taxes,  the 
notes  of  the  General  Bank  in  a  short  time  rose  to 
great  repute,  and  were,  by  many,  preferred  to 
specie,  insomuch  that  they  soon  came  to  pass  cur 
rent  for  one  per  cent,  more  than  the  coin  itself.— 
WOOD. 


CHAPTER  III. 


••» 

Law's  scheme  of  a  commercial  company— The  Mississippi  company 
— Jealousy  of,  and  opposition  to,  Law — He  is  sustained  by  the 
Regent— The  brothers  Paris— The  anti-system,— Law  initiates  a 
speculation  in  stocks — Companies  of  the  East  and  West  Indies 
united— Shares  rise  rapidly  — The  rue  Quincampoix  — Stock 
brokers — Run  on  the  bank — Law  triumphs  over  everything. 


3*  5T 


CHAPTEE  II 

LAW  was  always  scheming  to  concentrate  into 
one  establishment  the  bank,  the  administration  of 
the  public  revenues,  and  the  commercial  monopo 
lies.  He  resolved,  in  order  to  attain  this  end,  to 
organize,  separately,  a  commercial  company,  to 
which  he  would  add,  one  after  another,  different 
privileges  in  proportion  to  its  success,  and  which  he 
would  then  incorporate  with  the  general  bank. 
Constructing  thus  separately  each  of  the  pieces  of 
his  vast  machine,  he  proposed  ultimately  to  unite 
them  and  form  the  grand  whole,  the  object  of  his 
dreams  and  his  ardent  ambition. 

An  immense  territory,  discovered  by  a  French 
man,  in  the  ISTew  World,  presented  itself  for  the 
speculations  of  Law.  The  Spanish  had  established 
themselves  a  long  time  before  around  the  Gulf  of 
Mexico,  the  English  along  the  shores  of  Carolina 
and  Virginia,  the  French  in  Canada.  But,  while 
the  southern  borders  of  America  were  thus  occupied 
by  Europeans,  the  interior  of  this  beautiful  country 
was  unexplored  and  left  to  its  Indian  population. 


60  MEMOIR   OF   JOHN   LAW. 

The  Chevalier  de  Lasalle,  the  famous  traveller  of 
the  time,  having  penetrated  into  America  by  Upper 
Canada,  descended  the  river  Illinois,  arrived  sud 
denly  at  a  great  river  half  a  league  wide,  and, 
abandoning  himself  to  the  current,  was  borne 
into  the  Gulf  of  Mexico.  This  river  was  the 
Mississippi.  The  Chevalier  de  Lasalle  took  pos 
session  of  the  country  he  had  passed  through 
for  the  king  of  France,  and  gave  it  the  beau 
tiful  name  of  Louisiana.  A  colony  was  imme 
diately  sent  there.  A  bold  trader,  named  Crosat, 
obtained  the  privilege  of  trading  there,  and 
attempted  to  found  an  establishment,  which  failed 
of  success  on  account  of  the  jealousy  of  the  neigh 
bors,  the  negligence  of  the  colonists,  and  the  want 
of  discipline  among  the  troops.  He  then  demanded 
permission  to  resign  this  privilege,  which  had  be 
come  a  burden.  Law  conceived  the  idea  of  becom 
ing  his  successor.  There  was  much  said  of  the 
magnificence  and  fertility  of  this  new  country, 
of  the  abundance  of  its  products,  of  the  richness 
of  its  mines,  which  were  reported  to  be  much  more 
extensive  than  those  of  Mexico  or  Peru.  Law,  tak 
ing  advantage  of  this  current  of  opinion,  projected 
a  company  which  should  unite  the  commerce  of 
Louisiana  with  the  fur  trade  of  Canada.  The 
regent  granted  all  he  asked  by  an  edict  given  in 


THE  WEST   INDIA   COMPANY.  61 

August,  1717,  fifteen  months  after  the  first  esta 
blishment  of  the  bank. 

The  new  company  received  the  title  of  the  West 
Indian  Company.  It  was  to  have  the  sovereignty 
of  all  Louisiana  on  the  condition  only  of  liege 
homage  to  the  king  of  France,  and  of  a  crown  of 
gold  of  thirty  marcs  at  the  commencement  of  every 
new  reign.  It  was  to  exercise  all  the  rights  of  sove 
reignty,  such  as  levying  troops,  equipping  vessels  of 
war,  constructing  forts,  establishing  courts,  working 
mines,  etc.  The  king  relinquished  to  it  the  vessels, 
forts  and  munitions  of  war  which  belonged  to  the 
Crosat  Company,  and  conceded,  furthermore,  the 
exclusive  right  of  the  fur  trade  of  Canada.  The 
arms  of  this  sovereign  company  represented  the  effigy 
of  an  old  river-god  leaning  upon  a  horn  of  plenty. 

The  capital  furnished  by  the  stockholders  was  one 
hundred  million  francs.  It  was  divided  into  two 
hundred  thousand  shares  of  five  hundred  francs  each. 
These  shares  were  issued  in  the  form  of  a  note  to  the 
holder,  and  were  transferable  by  a  simple  indorse 
ment.  To  all  these  arrangements  Law  added 
another  very  important  one,  with  the  double  design 
of  insuring  a  market  for  the  shares  and  of  raising 
the  national  credit.  We  have  seen  that  the  royal 
stocks  of  all  kinds  had  been  converted  into  two  hun 
dred  and  fifty  millions  of  state  notes,  which  were  at 


62  MEMOIR   OF   JOHN   LAW. 

a  discount  of  seventy  or  eighty  per  cent.,  and  that 
it  was  impossible  to  pay  them  from  the  treasury. 
Law  caused  to  be  inserted  in  the  edict  a  clause  by 
which  the  shareholders  were  authorized  to  pay  one- 
quarter  in  money  and  three-quarters  in  state  notes. 
Twenty-five  millions  of  specie  being  sufficient  for 
the  first  works  of  the  company,  seventy-five  mil 
lions  of  state  notes  thus  found  an  advantageous  out 
let,  which  could  not  fail  to  relieve  immediately  the 
one     hundred     and    seventy-five    millions    which 
remained  in  the  market.     The  treasury  would  con 
tinue  to  pay  the  four  per  cent,  interest  allowed  on 
state  notes,   which  made  three  millions  payable 
annually  by  the  state  to  the  company.     The  first 
year  these  three   millions  were   to   be  devoted  to 
meeting  the  expenses  of  the  first  establishment  of 
the  company ;  the  following  years  they  were  to  be 
divided  among  the  shareholders  with  the  profits  of 
the  commerce.    This  combination  had  the  following 
effect :  the  government  abandoned  to  one  part  of  its 
creditors  the  sovereignty  and  commerce  of  Louisiana 
and   Canada,  on  the   condition  that  they  should 
advance  twenty-five   millions  in  cash  toward   the 
establishment  of  the  new  colony. 

The  shares  of  the  "Western  Company  did  not,  at 
first,  produce  much  excitement,  except  among  those 
capitalists  who  held  state  notes.  The  public,  gene- 


VALUE   OF   THE   SHARES.  63 

rally,  remained  indifferent,  notwithstanding  the 
marvellous  things  which  were  related  of  the  terri 
tory  which  had  been  ceded  to  the  company.  The 
shares  were  sold  below  par,  which  was  perfectly  na 
tural,  as  they  had  been  paid  for  by  twenty-five  mil 
lions  of  money  and  seventy-five  millions  in  notes, 
which  were  worth  at  most  twenty-five  millions — the 
whole  capital  then  represented  only  fifty  millions  in 
fact,  and  of  course  the  shares  were  below  par — not 
unlike  a  good  deal  of  our  present  bank  capital, 
which  is  credit  and  credit  only.  However,  they  had 
contributed  to  raise  the  credit  of  national  securities. 
The  bank  bought  a  certain  number  of  them,  and  in 
vested  its  capital  of  six  millions  in  shares  of  the 
"Western  Company. 

Law  promptly  commenced  the  initiatory  steps  for 
the  establishment  projected  in  America.  Vessels 
were  armed,  troops  were  embarked,  prostitutes  and 
vagabonds  were  collected  in  order  to  send  them  to 
those  solitudes  which  it  was  attempted  to  people. 
Grants  of  land  were  made,  and  Law  rallied,  even 
from  the  interior  of  Germany,  farmers  who  went  to 
Brest  to  embark. — (JSToTES  1,  2,  3.) 

Law  gained  daily  upon  the  esteem  of  the  regent, 
a  prince  passionately  fond  of  everything  ingenious 
and  brilliant,  and  reduced  by  immediate  distress 
to  sustain  himself  by  a  mere  chimera. 


64:  MEMOIR   OF   JOHN   LAW. 

The  Council  of  Finance  witnessed  the  increasing 
influence  of  Law  with  jealousy,  and  the  Duke  of 
JSToailles,  president  of  the  council,  who  had  always 
advocated  economy  by  opposing  the  hazardous  ex 
periment  of  a  system  of  credit,  gave  in  his  resigna 
tion.     He  was  succeeded  by  M.  d'Argenson,  former 
chief  of  police — a  bold,  adroit  man,  devoted  to 
the    regent,   but-   unskilled   in    financial   matters. 
Law  encountered  still  another  opposition — no  lees 
than    that    of    the    parliament.     This    body  had 
thought  that,  with  an  actual  minority,  they  had  yet 
an  opportunity  to  recover  the  importance  which 
they  had  lost  under  Louis  XIV.     It  harassed  the 
regent  by  annoyance  of  every  description,  and  tes 
tified^  above  all,  the  liveliest  hostility  to  the  Scotch 
financier..    The  hatred  of  novelties,  natural  to  an 
antiquated  body,  was  not  the  only  cause  of  this  hos 
tility.     Law  had  said  openly,  that  by  his  credit  sys 
tem,  he  would  render  the  court  independent  of  par 
liaments,  by  relieving  them  from  the  necessity  of 
extraordinary  taxes.     He  had  even  added  that  he 
would  furnish  the  regent  with  means  of  repay 
ing  the  expenses  of  the  courts.      To  the  views 
of    strict  prudence,   then,   were  joined  some   en 
tirely  personal  motives  of  hostility  to  Law,  and  they 
determined  to  fulminate  a  decree  against  his  grow 
ing  system. 


HOSTILITY    OF   PARLIAMENT.  65 

Parliament  did  not  know  how  to  commence  pro 
ceedings  against   the  Western  Company.       There 
were  no  good  reasons  against  the  establishment  of 
a    commercial    company.       It    decided   to   strike 
at  the  bank,  against  which,  however,   there  was 
much  less  to  say,  at  least  in  the  condition  in  which 
it  then   was.      Established  in  May,  1716,  during 
a  year  and   a  half  it  had  rendered  real  service 
to  the    credit    of  the    state ;    having   become    a 
general  bank  in  April,  1717,  it  had  during  five 
months  circulated  its  notes  throughout  France.     It 
was  the  decree  which  ordered  the  receipt  of  bank 
notes  in  payment  of  taxes,  and  which  enjoined  all 
the  treasurers  to  pay  specie  for  them  at  the  demand 
of  the  holders,  which  parliament  resolved  to  annul. 
By  an  act  of  the  18th  of  August,  1717,  it  repealed 
the  enacting  part  of  the  decree,  and  forbade  the 
receiving  officers  of  the  government  to  receive  the 
notes  of  Law's  bank. 

The  regent,  who  had  many  demands  to  make  of 
parliament  whether  on  the  subject  of  the  legiti 
mate  princes  or  on  that  of  finances,  resolved  to  sum 
mon  them  to  the  royal  presence.  The  infant  king 
was  brought  from  Yincennes  to  Paris  and  parlia 
ment,  obliged  to  come  on  foot  to  the  Louvre, 
yielded  to  everything  which  the  will  of  the  regent 
imposed  upon  them.  The  act  against  the  bank  was 


66  MEMOIR   OF   JOHN   LAW. 

annulled ;  it  was  decided,  besides,  that,  in  future, 
parliament's  remonstrance  against  the  royal  decrees 
must  be  made  within  eight  days,  after  which  delay 
the  decree  should  be  enrolled  and  registered.  Par 
liament  submitted,  and  Law  was  at  liberty  to  con 
tinue  his  operations.  During  the  latter  part  of  the 
year  1717  and  the  beginning  of  1718,  everything 
remained  in  statu  quo.  The  bank  continued  to  ren 
der  undisputed  services  to  public  and  private  credit, 
and  as  to  the  Western  Company,  it  was  making  pro 
gress  in  etablishing  itself.  The  shares  of  the  com 
pany  rose  slowly,  and  were  still  below  par ;  but  it 
was  evident  that  Law,  now  in  high  favor,  would 
soon  make  himself  absolute  master  of  the  finances. 
M.  d'Argenson,  in  his  turn  had  become  jealous  of 
the  powerful  Scotchman,  and  he  meditated  an  at 
tack  upon  the  Western  Company.  At  this  time 
there  were  three  brothers  engaged  in  commerce 
named  Paris,  well  known  by  their  vast  fortune, 
their  successful  speculations,  and  their  intimate  con 
nection  with  Yoltaire,  They  were  from  Grenoble, 
shrewd,  active,  and  universally  esteemed.  M.  d'Ar 
genson  established  a  secret  alliance  with  them,  and 
they  formed  what  was  called  the  anti-system.  The 
collection  of  one  part  of  the  public  revenue  was 
still  leased,  consisting  of  the  tax  on  salt,  on  the 
registration  of  laws,  on  expenditures,  etc.,  etc. ;  and 


FARMING   THE   REVENUE.  67 

it  was  these  different  collections  united,  which  had 
been  granted  to  an  association  of  financiers,  with 
the  title  of  Farmers  General.  M.  d'Argenson  put 
them  up  at  auction  anew,  and  had  them  declared 
to  the  Paris  Brothers,  under  the  name  of  d'Aymard 
Lambert,  for  the  annual  sum  of  forty-eight  millions 
five  hundred  thousand  francs.  The  capital  stock 
for  this  enterprise  of  collecting  the  revenues  was 
fixed  at  one  hundred  millions,  like  that  of  the 
Western  Company,  and  divided  into  shares  of  the 
same  form  and  value.  There  was  promise  of  large 
dividends  on  these  shares,  for  the  profits  of  the  col 
lections  were  estimated  at  thirteen  or  fourteen  mil 
lions,  which  would  make  twelve  or  fifteen  per  cent, 
on  the  capital  paid  in  ;  besides,  this  dividend  was 
insured,  because  it  was  founded,  not  upon  the  con 
tingent  successes  of  commerce,  but  upon  the  certain 
collection  of  the  national  revenues.  In  reality  these 
shares  were  more  dear,  for  instead  of  being  payable 
in  state  notes,  which  were  at  seventy-five  per  cent, 
discount,  they  were  payable  in  good  securities ;  but 
their  income  was  so  great  and  so  certain  that  they 
were  sure  to  have  the  advantage  over  the  Western 
shares.  They  obtained  it,  in  fact,  and  soon  they 
were  in  great  demand  in  the  market,  under  the  name 
of  stock  in  the  anti-system. 
The  popularity  of  the  bank  continued  constantly 


68  MEMOIK   OF   JOHN   LAW. 

to  increase,  nevertheless ;  the  shares  of  the  Western 
Company  did  not  rise  much,  but  remained  much 
below  par,  while  the  shares  of  the  anti-system  were 
very  much  sought.  Law*  was  not  discouraged,  and 
counted  upon  the  achievement  of  his  plan  to 
triumph  over  the  brothers  Paris.  At  first  he 
changed  the  bank  from  a  private  to  a  public  esta 
blishment,  as  he  had  always  intended  to  do.  The 
4th  of  December,  1718,  two  years  and  a  half  after 
its  creation,  it  was  declared  to  be  the  Royal  Bank. 
Law  was  appointed  director  of  it;  the  original 
capital  was  repaid  to  the  shareholders  in  specie.  In 
January,  February,  March  and  April,  the  increas 
ing  demand  for  notes  caused  an  increase  of  the  issue 
to  one  hundretl  and  ten  millions.  They  were  dif 
fused  throughout  France,  and,  to  make  the  use  of 
them"  still  more  universal,  the  transportation  of  coin 
between  towns  where  there  were  offices  of  the  bank 
was  forbidden.  The  remittances  between  these 
towns  must  be  made  in  bank  notes.  This  forced 
measure  would  have  been  dangerous  if  confidence 
had  not  been  absolute.  It  was  attributable  to  the 
impatience  for  success  which  characterized  the 
disposition  of  Law. — (NOTES  4,  5,  6.) 

Law  revolved  in  his  mind  many  other  projects 
relating  to  his  Western  Company.  He  spoke,  at 
first  mysteriously,  of  the  benefits  which  he  was  pre- 


OPERATING   FOR   A    "RISE."  69 

paring  for  it.  Associating  with  a  large  number  of 
noblemen,  whom  his  wit,  his  fortune,  and  the  hope 
of  considerable  gains  attracted  around  him,  he 
urged  them  strongly  to  obtain  for  themselves  some 
shares,  which,  he  asserted,  would  soon  rise  rapidly 
in  the  market.  He  was  himself  soon  obliged  to  buy 
some  above  par.  The  par  value  being  five  hundred 
francs,  two  hundred  of  them  represented  at  par  a 
sum  of  one  hundred  thousand  francs.  The  price 
for  the  day  being  three  hundred  francs,  sixty  thou 
sand  francs  was  sufficient  to  buy  two  hundred 
shares.  He  contracted  to  pay  one  hundred  thou 
sand  francs  for  two  hundred  shares  at  a  fixed  future 
time ;  this  was  to  anticipate  that  they  would  gain 
at  least  two  hundred  francs  each,  and  that  a  profit 
of  forty  thousand  francs  could  be  realized  on  the 
whole.  He  agreed,  in  order  to  make  this  sort  of 
wager  more  certain,  to  pay  the  difference  of  forty 
thousand  francs  in  advance,  and  to  lose  the  differ 
ence  if  he  did  not  realize  a  profit  from  the  proposed 
transfer.  This  was  the  first  instance  of  a  sale  at  an 
anticipated  advance.  This  kind  of  trade  consisted 
in  giving  earnest  money,  called  a  premium,  which 
the  purchaser  lost  if  he  failed  to  take  the  property. 
He  who  made  the  bargain  had  the  liberty  of  re 
scinding  it  if  he  would  'lose  more  by  adhering  to  it 
than  by  abandoning  it.  No  advantage  would  ac- 


70 


MEMOIR   OF   JOHN   LAW. 


crue  to  Law  for  the  possible  sacrifice  of  forty  thou 
sand  francs,  unless,  at  the  designated  time,  the 
shares  had  not  been  worth  as  much  as  sixty  thou 
sand  francs,  or  three  hundred  francs  each ;  for  hav 
ing  engaged  to  pay  one  hundred  thousand  francs  for 
what  was  worth  only  fifty  thousand,  for  instance, 
he  would  suffer  less  to  lose  his  forty  thousand  francs 
than  to  keep  his  engagement.  But,  evidently,  if 
Law  did  wish  by  this  method  to  limit  the  possible 
loss,  he  hoped  nerertheless  not  to  make  any  loss  at 
all ;  and,  on  the  contrary,  he  believed  firmly  that 
the  two  hundred  shares  would  be  worth  at  least  the 
hundred  thousand  francs,  or  five  hundred  francs 
each,  at  the  time  fixed  for  the  expiration  of  the  con 
tract.  This  large  premium  attracted  general  atten 
tion,  and  people  were  eager  to  purchase  the  Western 
shares.  They  rose  sensibly  during  the  month  of 
April,  1719,  and  went  nearly  to  par.  Law  disclosed 
his  projects;  the  regent  kept  his  promise,  and 
authorized  him  to  unite  the  great  commercial  com 
panies  of  the  East  and  West  Lidies. 

The  two  companies  of  the  East  Indies  and  of 
China,  chartered  in  1664  and  1713,  had  conducted 
their  affairs  very  badly :  they  had  ceased  to  carry 
on  any  commerce,  and  had  underlet  their  privileges 
at  a  charge  which  was  very  burdensome  to  the 
trade.  The  merchants  who  had  bought  it  of  them 


THE   INDIAN   COMPANY.  71 

did  not  dare  to  make  use  of  their  privileges,  for 
fear  that  '•  aeir  vessels  would  be  ^seized  by  the 
creditors  of  the  company.  Navigation  to  the 
East  was  entirely  abandoned,  and  the  necessity  of 
reviving  it  had  become  urgent.  By  a  decree  of 
May,  1719,  Law  caused  to  be  accorded  to  the  West 
India  Company  the  exclusive  right  of  trading  in  all 
the  seas  beyond  the  Cape  of  Good  Hope.  From  this 
time  it  had  the  sole  right  of  traffic  with  the  islands 
of  Madagascar,  Bourbon  and  France,  the  coast  of 
Sofola  in  Africa,  the  Red  Sea,  Persia,  Mongolia, 
Siam,  China  and  Japan.  The  commerce  of  Senegal, 
an  acquisition  of  the  company  which  still  carried 
it  on,  was  added  to  the  others,  so  that  the  company 
had  the  right  of  French  trade  in  America,  Africa 
and  Asia.  Its  title,  like  its  functions,  was  enlarged ; 
it  was  no  longer  called  the  West  Indian  Company, 
but  the  INDIAN  Company.  Its  regulations  remained 
the  same  as  before.  It  was  authorized  to  issue 
another  lot  of  shares,  in  order  to  raise  the  necessary 
funds  either  to  pay  the  debts  of  the  companies 
which  it  succeeded  or  for  organizing  the  proper 
establishments.  Fifty  thousand  of  these  shares 
were  issued  at  a  par  of  five  hundred  francs,  which 
made  a  nominal  capital  of  twenty-five  millions. 
But  the  company  demanded  five  hundred  and  fifty 
francs  in  cash  for  them,  or  a  total  of  twenty-seven 


72  MEMOIR   OF   JOHN   LAW. 

millions  two  hundred  and  fifty  thousand  francs,  inas 
much  as  it  esteemed  its  privileges  as  very  great  and 
its  popularity  certain.  It  required  fifty  francs  to 
be  paid  in  advance,  and  the  remaining  five  hundred 
in  twenty  equal  monthly  payments.  In  case  the 
payments  should  not  be  fully  made,  the  fifty  francs 
paid  in  advance  were  forfeited  by  the  subscriber. 
It  was  nothing  but  a  bargain  made  at  a  premium 
with  the  public. 

The  prompt  realization  of  the  promises  of  Law, 
the  importance  and  extent  of  the  last  privileges 
granted  to  the  company,  the  facilities  accorded  to 
the  subscribers,  everything  induced  a  subscription 
to  the  new  shares.  The  movement  became  ani 
mated.  One  could,  by  the  favorable  terms  offered, 
by  paying  out  five  hundred  and  fifty  francs,  obtain 
eleven  shares  instead  of  one,  and  thus,  with  a  little 
money,  speculate  to  a  considerable  amount.  To  this 
method  of  attracting  speculators,  Law  added  ano 
ther — he  procured  a  decision  that  no  one  should 
subscribe  for  the  new  shares  without  exhibiting  four 
times  as  many  old  ones.  It  was  necessary,  there 
fore,  to  hasten  to  obtain  them,  in  order  to  fulfill  the 
requisite  condition.  In  a  short  time  they  were  car 
ried  up  to  par,  and  far  above  that.  From  three 
hundred  francs,  at  which  they  were  at  the  start,  they 
rose  to  five  hundred,  five  hundred  and  fifty,  six 


EECOINING   THE   SPECIE.  73 

hundred,  and  seven  hundred  and  fifty  francs — that 
is,  they  gained  one  hundred  and  fifty  per  cent. 
These  second  shares  were  called  the  daughters,  to 
distinguish  them  from  the  first. 

Law,  still  entirely  absorbed  by  the  desire  of  van 
quishing  the  anti-system,  thought  only  of  adding 
new  privileges  to  those  which  the  Indian  Company 
already  enjoyed.  There  were  great  profits  to  be 
made  by  the  recoining  of  the  specie.  The  reader 
will  remember  that  the  regent  had  ordered  the 
recoining  of  a  billion  of  specie,  and  the  reissue 
of  it  for  twelve  hundred  millions ;  there  would  be, 
therefore,  a  gain  of  two  hundred  millions.  A  small 
part  of  the  coin  had  yet  been  brought  in,  and  almost 
all  the  profit  still  remained  to  be  made,  except  that 
which  was  absorbed  by  the  counterfeiters.  By  a 
new  decree  of  the  25th  of  August,  1719,  Law  caused 
to  be  granted  to  the  Indian  Company  the  coining 
and  management  of  the  specie.  The  company 
paid  fifty  millions  for  this  new  privilege.  The 
good  natured  and  prodigal  regent  needed  this  sum 
for  the  expenses  of  the  government  and  of  the 
court.  To  enable  the  company  to  pay  for  this,  it 
was  authorized  to  create  fifty  thousand  more  new 
shares,  at  five  hundred  francs  each,  which  would 
have  produced  only  twenty-five  millions.  Never 
theless,  depending  upon  the  enthusiasm  of  the  pub- 


MEMOIB   OF   JOHN   LAW. 


lie,  they  were  issued,  not  for  five  hundred  and  fifty 
francs,  like  the  last,  but  for  one  thousand  francs,  in 
order  to  mako^ip  the  sum  due  the  government.  The 
econd  issue  of  shares  was  called  the  daughters  ; 
the  third  was  nicknamed  the  grand-daughters. 

The  same  precautions  were  taken  to  insure  their 
uecess.  The  payments  were  to  be  made  during 
twenty  months.  To  procure  one  of  the  new  shares 
it  was  necessary  to  have  five  of  the  old,  and  notice 
was  given  that  the  subscription  books  would  be 
kept  open  only  twenty  days,  and  that  after  that 
time  all  the  shares  not  subscribed  for  would  belong 
to  the  company.  These  artifices,  entirely  novel 
then,  produced  the  greatest  excitement.  People 
crowded  the  offices  of  the  company  to  subscribe  for 
the  shares  at  one  thousand  francs.  One  circum 
stance  contributed  very  much  to  excite  this  eager 
ness.  The  company  announced  that  it  would  pay 
semi-annual  dividends  of  six  per  cent.,  making  an 
annual  income  of  twelve  per  cent.  It  was  possible 
to  fulfill  this  promise,  although  it  was  a  very  bold 
one.  There  were  two  hundred  thousand  shares  of 
the  first  issue,  fifty  thousand  of  the  second,  and  fifty 
thousand  of  the  third,  making  a  total  of  three  hun 
dred  thousand.  At  five  hundred  francs  each  they 
formed  a  nominal  capital  of  one  hundred  and  fifty 
millions.  It  required  eighteen  millions  to  make  a 


GKEAT    KISE    IN    THE    SHARES.  75 

dividend  of  twelve  per  cent,  per  annum.  Now  the 
three  millions  to  be  paid  the  company  annually,  by 
the  government,  on  the  seventy-five  millions  of 
state  notes,  the  probable  profit  on  the  coinage,  and 
the  profits  from  commerce,  might  easily  produce 
eighteen  millions  a  year. 

The  month  of  August  approached.  The  shares 
rose  far  above  one  thousand  francs.  Those  who 
had  bought  at  this  price  already  obtained  a  con 
siderable  advance ;  but  those  who  had  purchased  at 
five  hundred,  and  at  three  hundred  francs,  which  was 
the  case  with  the  first  purchasers,  gained  one  and  two 
hundred  per  cent,  profit.  The  creditors  of  the  govern 
ment,  who  had  bought  the  first  shares  only  to  make 
use  of  their  state  notes,  and  who  were  rejoiced  not 
only  to  recover  the  whole  value  of  property  which 
they  had  considered  lost,  but  to  see  it  doubled,  has 
tened  to  sell,  and  to  realize  their  unexpected  profit. 
The  speculators,  more  wary,  held  on  to  their  shares, 
bought  instead  of  sold,  and  thought  in  this  way  to 
lay  the  foundation  of  large  fortunes. 

There  was,  between  the  St.  Denis  and  St.  Martin, 
a  street  named  Quincampoix,  which  had  always 
been  inhabited  by  bankers  and  brokers.  There  was 
not  then  at  Paris,  as  at  London  and  Amsterdam,  an 
exchange,  where  business  men  assembled  to  trade 
in  merchandise  or  public  stocks.  People  used  to 


76  MEMOIR  OF  JOHN  LAW. 

go  to  the  bankers  in  the  rue  Quincampoix  to  nego 
tiate  bills  and  speculate  in  the  different  stocks 
issued  by  the  treasury.  Since  the  ruinous  wars  of 
Louis  XIY.  had  obliged  trade  to  be  earned  on  by 
credit,  there  had  arisen  in  Paris  a  class  of  traders 
in  notes  accepted  by  the  debtor  upon  whose  obli 
gations  they  speculated.  Needy  debtors  produce 
usurers  in  the  same  way  that  unpunctual  govern 
ments  produce  stock-jobbers.  All  doubtful  securi 
ties  seem  most  to  attract  the  venturesome  speculator ; 
he  delights  in  such  hazards,  having  the  morality,  as 
well  as  manners,  of  the  gambler.  Paris  swarmed 
with  these  men,  of  whom  some  had  made  fortunes, 
while  others  were  awaiting  the  opportunity  to  do 
so,  and,  while  waiting,  lived  by  their  wits.  As  at 
this  time  there  were  no  professional  stock-brokers, 
some  of  these  hucksters  had  set  up  counters  in  the 
rue  Quincampoix,  and  bought  and  sold  the  stocks 
in  the  market  on  others'  account.  Since  the  organ 
ization  of  these  new  companies — the  Indian  and 
that  of  Farmers  of  the  Revenue — these  offices  were 
much  frequented,  and  even  the  speculators,  being 
unable  to  withstand  this  tendency,  had  ended  by 
resorting  to  the  rue  Quincampoix,  where  they  col 
lected  in  numerous  groups.  There,  newp  which 
could  affect  the  rise  and  fall  of  stocks  was  retailed, 
and  shares  were  offered  and  sought. 


THE    "  SYSTEM  "    TRIUMPHANT.  77 

There  was  a  division  among  these  brokers.  Some 
pronounced  themselves  for  Law's  system,  others 
against  it.  One  of  the  most  influential  among  them, 
named  Leblanc,  had  joined  the  brothers  Paris 
against  Law.  The  Prince  of  Conti — who,  at  first, 
had  been  shown  partiality  in  the  subscriptions,  but 
whom  Law  had  been  compelled  to  deny  because  of 
his  exorbitant  demands — had  joined  the  opponents 
of  what  was  called  the  "  system."  They  combined 
their  means,  procured  a  large  quantity  of  bank 
notes,  and  demanded  the  specie.  Law,  being 
-warned  in  season,  paid  those  presented,  first,  and, 
to  evade  the  others,  he  had  recourse  to  a  violent 
measure,  which  the  dishonorable  proceeding  of  his 
opponents  accounts  for  without  justifying.  He  pro 
cured  a  decree  reducing  the  value  of  coin  after  a 
certain  day.  Those  who  hoarded  specie,  not  wish 
ing  to  submit  to  this  reduction,  hastened  to  deposit 
it  in  the  bank.  The  entire  public  declared  itself  in 
favor  of  Law,  and  the  Prince  of  Conti  was  the 
object  of  universal  condemnation. 


1STOTES  TO  CHAPTEE  HE. 

(1.)  THE  regions  watered  by  the  Mississippi,  im 
mense,  unknown  virgin  solitudes  which  the  imagin 
ation  filled  with  riches,  was  an  unlimited  field 
offered  to  charlatanism.  The  public  credulity  was 
tested  with  rare  impudence.  Large  engravings 
were  distributed  representing  the  arrival  of  the 
French  at  the  river,  and  savages  with  their  squaws 
rushing  to  meet  their  new  masters  with  evident  res 
pect  and  admiration.  The  description  set  forth 
that  there  were  mountains  filled  with  gold,  silver, 
copper,  lead  and  quicksilver.  As  these  metals 
were  very  common  and  the  savages  did  not  suspect 
their  value,  they  exchanged  gold  and  silver  for 
knives,  saucepans,  brooches,  little  looking-glasses, 
or  even  a  glass  of  brandy.  One  of  the  peculiarities 
of  the  engraving  was  the  address  to  the  religious. 
The  aborigines  were  falling  at  the  feet  of  the  Jesuit 
priests  and  the  legend  recited  that  the  idolatrous 
Indians  eagerly  demanded  to  be  baptized.  Great 
care  was  taken  to  educate  their  children.  One  old 
soldier  named  Cadillac,  formerly  employed  in 

78 


NOTES   TO    CHAPTER   III.  79 

Louisiana,  was  so  imprudent  as  to  say  that  it  was 
all  humbug.  His  silence  was  secured  by  sending 
him  to  the  Bastile. — COCHUT. 

(2.)  Unimproved  parts  of  Louisiana  were  sold  for 
thirty  thousand  livres  the  square  league. — WOOD. 

(3.)  In  order  to  make  as  much  as  possible  out  of 
the  Mississippi,  to  say  nothing  of  the  jugglery  prac 
tised,  it  was  attempted  to  follow  the  example  of  the 
English,  and  create  some  efficient  establishments  in 
those  vast  regions.  To  people  them,  vagabonds, 
stout  beggars,  male  and  female,  and  a  quantity  of 
"  public  creatures  "  were  taken  from  Paris  and  the 
rest  of  the  kingdom. — SAINT  SIMON. 

(4.)  1718.  The  form  of  the  notes  was  changed  to 
"The   bank  promises  to  pay  the  bearer  at  sight 
—  livres  in  silver  coin  value  received,"  thus  mak 
ing  their  value  fluctuate  with  that  of  the  coin.   Law 
opposed  this. — WOOD. 

(5.)  After  the  success  of  the  bank  was  established 
the  Duke  of  Orleans'  took  it  into  his  own  hands 
against  the  wishes  of  Law.  The  General  Bank  was 
converted  into  the  Royal  Bank  (1718)  the  king  be 
coming  responsible  for  the  outstanding  notes. — 
WOOD. 


80  MEMOIR   OF   JOHN   LAW. 

(6.)  The  conversion  of  the  General  Bank  into  the 
Koyal  Bank  the  first  of  January  1719,  was,  said  an 
excellent  judge,  to  take  away  from  its  engagements 
the  limited  but  real  guaranty  of  an  effective  capital 
and  substitute  for  it  the  indefinite  and  doubtful 
capital  of  a  government  very  much  involved. — 

COOHTJT. 


CHAPTER  IV. 

The  national  debt — Law's  project  for  redeeming  it — Caution  neces 
sary  in  executing  the  project — The  collection  of  the  revenue 
granted  to  Law's  company — Arrangements  for  the  assumption  of 
the  national  debt  by  the  company — General  eagerness  to  sub 
scribe  for  the  shares — The  nobility  pay  court  to  Law — Rage  for 
speculation  begins — Stockjobbing  operations  of  the  brokers. 


CHAPTEK    IY. 

LAW  contemplated  at  last  the  completion  of  his 
project,  by  uniting  the  collection  of  the  revenues 
to  the  other  privileges  of  the  Indian  Company,  and 
redeeming  the  national  debt.  This  was  the  greatest 
and  most  difficult  part  of  his  plan.  Of  these  two 
measures,  the  first  would  destroy  the  anti-system  and 
give  the  indirect  administration  of  the  revenues 
to  the  Indian  Company ;  the  second  had  been  pro 
mised  to  the  regent,  and  would  free  the  government 
from  its  overwhelming  burdens. 

The  national  debt  was  fifteen  to  sixteen  hundred 
millions,  partly  in  contracts  for  perpetual  annuities, 
partly  in  state  notes  which  would  soon  be  due.  The 
interest  on  the  debt  was  eighty  millions,  or  one  half 
the  revenue  of  the  government.  Some  com 
bination  was  necessary  to  meet  the  state  notes 
at  their  maturity,  and  to  reduce  the  annual 
charges  which  the  public  treasury  could  no  longer 
sustain. 

Law  conceived  the  idea  of  substituting  the  com 
pany  for  the  government  and  converting  the  whole 


84:  MEMOIR   OF   JOHN   LAW. 

national  debt  into  shares  in  the  Indian  Company. 
To  accomplish  this,  he  wished  the  company  to  lend 
the  Treasury  the  fifteen  to  sixteen  hundred  millions 
which  would  redeem  the  debt ;  and  that,  to  obtain 
this  enormous  sum,  it  should  issue  shares  to  that 
amount.  In  this  manner  the  fifteen  or  sixteen  hun 
dred  millions  furnished  to  the  government  by  the 
company,  and  paid  out  by  the  government  to  its 
creditors,  must  return  to  the  company  by  the  sale 
of  its  shares.  Let  us  see  the  means  which  Law  had 
devised  to  insure  the  success  of  his  scheme.  The 
government  would  pay  three  per  cent,  interest  for 
the  sum  loaned  to  it,  which  would  make  forty-five 
or  forty-eight  millions  a  year.  The  treasury  would 
thus  effect  an  annual  saving  of  thirty-two  or  thirty- 
five  millions  in  the  interest  on  the  debt.  In  return, 
the  collection  of  the  revenue  must  be  transferred  to 
the  company,  notwithstanding  that  it  had  been  ac 
tually  granted  to  the  brothers  Paris.  The  collection 
would  pay  the  collectors  a  net  profit  of  fifteen  or 
sixteen  millions.  The  company,  receiving  three 
per  cent,  interest  on  the  capital  invested,  and  reap 
ing  from  another  source  a  profit  of  fifteen  or  sixteen 
millions,  would  be  in  a  position  to  pay  four  per  cent, 
on  the  sixteen  hundred  millions  of  the  debt  con 
verted  into  shares. 

The  profits  from  commerce  and  its  future  success, 


LIQUIDATION    OF   NATIONAL   DEBT.  85 

might  soon  enable  it  to  increase  this  dividend. 
According  to  the  prevailing  rates  of  interest,  which 
had  fallen  to  three  per  cent,  since  the  establish 
ment  of  the  bank,  this  was  a  sufficient  remunera 
tion  on  the  shares.  They  had,  beside,  the  hope 
of  increasing  their  capital.  The  shares  having, 
in  fact,  doubled  in  value  during  the  opposition  of 
the  anti-system,  they  ought  to  increase  still  more 
rapidly  since  they  were  relieved  from  this  opposi 
tion.  The  expectation  that  the  fifteen  or  sixteen 
hundred  millions  of  the  debt  would  be  invested  in 
the  shares,  was  well  founded.  There  was  even  a 
certainty  of  it ;  for  this  immense  capital,  forcibly  ex 
pelled  from  its  investment  in  state  securities,  could 
find  no  other  place  for  investment  than  in  the 
company. 

This  plan  of  Law  was  vast  and  bold.  Its  success 
would  liquidate  the  state  debt  and  diminish  the  an 
nual  charges  on  the  treasury,  reducing  the  interest 
from  eighty  millions  to  forty-five  or  forty-eight 
millions.  The  annual  charges,  from  which  the 
treasury  was  to  be  relieved,  were  to  be  paid  from 
the  profits  on  the  collection  of  the  revenue,  and 
the  contingent  profits  of  commerce.  The  whole 
operation  was  to  pay  the  creditors  of  the  state 
three  per  cent,  per  annum,  and  the  profits  and 
monopolies  heretofore  granted  to  farmers  of  the 


86  MEMOIR   OF  JOHN   LAW. 

revenue  and  commercial  companies.  This  three 
per  cent,  interest,  these  profits,  and  these  monopo 
lies,  as  we  shall  soon  see,  might  easily  amount  to 
the  sum  of  eighty  millions  annually  which  the 
creditors  were  formerly  paid.  Thus  far  they 
were  not  defrauded  by  this  forced  conversion  of 
securities ;  a  credit  entirely  new  was  substituted  for 
one  which  was  worn  out;  an  establishment  had 
been  created,  which,  combining  the  functions  of  a 
commercial  bank  and  the  administration  of  the 
finances,  must  become  the  most  colossal  financial 
power  ever  known. 

But  if  this  plan  offered  some  indisputable  advan 
tages,  yet  the  wisest  precautions  were  necessary  in 
the  execution  of.  it.  In  fact,  fifteen  or  sixteen  hun 
dred  millions  suddenly  displaced  and  transferred 
from  the  state  securities  to  shares  in  the  Indian  Com 
pany  must  be  managed  with  extreme  prudence  to 
induce  these  millions  to  come  to  the  company,  and  at 
the  same  time  to  prevent  all  precipitation  ;  to  avoid 
either  a  reluctance  or  a  too  great  eagerness  to  buy. 
We  shall  see  what  measures  were  taken  to  accom 
plish  this  operation,  the  most  audacious  which  had 
ever  been  attempted  in  finance. 

By  a  decree  of  the  27th  of  August,  1719,  the  lease 
of  the  principal  revenues  was  cancelled.  They  were 
withdrawn  from  the  brothers  Paris  and  granted  to 


CONVERSION    OF   PUBLIC    STOCKS.  87 

the  Indian  Company,  who,  instead  of  forty-five  mil 
lions  five  hundred  thousand  francs  a  year,  agreed  to 
pay  into  the  treasury  fifty-two  millions  a  year.  The 
company  promised  to  lend  the  government  fifteen 
hundred  millions,  at  three  per  cent. ;  this  made, 
consequently,  forty-five  millions  due  the  company 
annually,  which  it  was  authorized  to  deduct  from 
the  products  of  the  revenue,  so  that  there  only 
remained  seven  millions  a  year  to  be  paid  to  the 
government. 

The  payment  of  the  different  securities  was  then 
ordered,  each  in  its  separate  order.  The  holders  of 
the  different  titles  were  invited  to  present  them 
selves  at  the  offices  of  the  treasury,  where  receipts 
would  be  given  them  for  the  value  of  their  claims, 
which  receipts  they  would  then  present  at  the  offices 
of  the  company  who  would  pay  the  amount  of  them 
in  specie  or  in  bank  notes.  It  had  been  agreed  that 
a  sufficient  quantity  of  notes  should  be  manufac 
tured  to  make  these  payments,  and  that  they  should 
be  destroyed  immediately  when  they  were  received 
back  in  payment  for  the  shares.  The  payment  of 
the  debt  must  inevitably  be  effected  before  it  could 
be  converted  into  shares  of  the  Indian  Company.  It 
was  therefore  necessary  to  make  the  advance.  The 
bank,  now  a  royal  institution,  was  commissioned  to 
accomplish  this  by  its  notes. 


88  MEMOIR  OF  JOHN   LAW. 

Scarcely  were  these  arrangements  made  public, 
when  an  extraordinary  animation  was  everywhere 
manifested.  The  shares  of  the  farmers  of  the 
revenue  and  the  state  notes  being  about  to  disap 
pear,  the  shares  of  the  Indian  Company  would  be 
the  only  ones  remaining  for  the  speculators ;  besides, 
as  the  debt  was  to  be  paid,  it  was  evident  that  they 
offered  an  investment  which  would  be  eagerly 
sought.  They  rose  with  singular  rapidity.  From  one 
thousand  and  fifteen  hundred  francs  each,  they  rose 
to  two,  three,  and  four  thousand  francs ;  that  is,  to 
four,  six,  and  eight  times  the  original  cost. — (NOTE  1.) 

The  13th  of  September,  Law  commenced  the  issue 
of  the  new  shares.  There  were  already  three  hun 
dred  thousand  shares  of  a  capital  of  one  hundred 
and  fifty  millions — some  issued  at  five  hundred 
francs,  others  at  five  hundred  and  fifty,  and  the  last 
at  one  thousand.  A  new  issue  of  one  hundred 
thousand  shares  was  ordered,  at  the  nominal  price 
of  five  hundred  francs,  and  at  a  realized  price  of 
five  thousand  francs,  which  made  a  nominal  capital 
of  fifty  millions  and  a  fund  paid  in  of  five  hundred 
millions.  It  was  a  third  of  the  sum  which  the 
company  was  bound  to  furnish  the  government. 
The  payment  was  to  be  made  in  ten  equal  install 
ments,  payable  monthly.  The  first  was  the  only 
one  demanded  in  cash. 


PREFERENCE    GIVEN   TO    STATE    CREDITORS.  89 

The  eagerness  to  subscribe  was  prodigious.  All 
tlie  disposable  capital,  whether  in  the  hands  of  the 
brokers  or  in  those  of  the  creditors  of  the  state,  was 
invested  in  the  subscriptions.  Every  one  foresaw  the 
importance  of  those  shares,  which  were  to  be  the  sole 
investment  for  the  fifteen  hundred  millions,  divided 
previously  in  the  public  debt  into  different  kinds  of 
stock,  and  people  rushed  to  secure  them  early,  in 
order  to  make  the  unfortunate  state  creditors  pay 
dear  for  them.  The  acquisition  of  them  in  large 
amounts  was  not  difficult,  as  with  five  thousand 
francs,  ten  shares  could  be  subscribed  for. — (NOTE  2.) 

The  creditors,  seeing  themselves  deprived  of  their 
investment,  complained,  with  reason,  that  they  had 
not  the  preference  over  every  other  class  of  subscri 
bers.  Law,  perceiving  the  mistake  he  had  made,  pro 
cured  a  decree  the  26th  of  September,  thirteen  days 
after  the  opening  of  the  subscription  books,  ordering 
the  payment  for  the  shares  to  be  received  only  in 
state  notes  or  in  receipts.  This  insured  the  creditors 
the  preference,  or,  what  was  as  well,  an  advantageous 
sale  of  their  securities  to  speculators.  But  this  was 
done  rather  late,  as  the  speculators  had  already 
secured  to  themselves  a  large  part  of  the  amount 
issued.  This  measure,  although  tardy,  had  still 
another  advantage,  it  relieved  the  treasury  from 
paying  the  advance  on  the  redemption  of  the  debt 


90  MEMOIR   OF   JOHN    LAW. 

in  bank  notes.  Instead  of  exchanging  the  receipts 
for  notes  and  the  notes  for  shares,  the  receipts  were 
taken  directly  to  the  office  for  receiving  sub 
scriptions.  The  proceeding  was  thus  simplified, 
and  the  transient  issue  of  an  enormous  number  of 
notes  was  avoided. 

The  first  subscription  having  been  taken  up  in  a 
few  days,  Law  opened  a  new  one  on  the  28th  of 
September,  for  the  same  amount  and  on  exactly  the 
same  conditions  as  the  preceding. 

The  eagerness  of  subscribers  was  the  same.  The 
creditors  passed  whole  days  at  the  offices  of  the 
treasury  to  obtain  their  receipts,  and  there  were 
some  even  who  had  their  meals  brought  to  them 
there,  so  that  they  might  not  lose  their  turn  in  the 
ranks.  The  state  notes  were,  of  course,  much  in 
demand,  and  had  rapidly  risen  to  par.  They  had 
even  given  rise  to  a  most  reprehensible  speculation. 
A  confidential  clerk  of  Law,  the  Prussian  Yersino- 
bre,  having  known  in  advance  of  the  decree  regard 
ing  the  payment,  abused  his  knowledge  of  the  secret, 
and  caused  to  be  bought  by  brokers  with  whom  he 
was  associated,  a  large  amount  of  state  notes  at  fifty 
or  sixty  per  cent,  below  their  nominal  value,  and 
employed  them  for  the  subscriptions  when  they  were 
received  at  par.  When  it  is  considered  that  the 
subscriptions,  already,  were  sold  at  a  large  advance, 


EAGEENESS   TO    SUBSCRIBE.  91 

and  that  by  means  of  the  state  notes  they  were  bought 
at  about  half  price,  it  will  be  understood  what  a 
profit  this  company  of  brokers  must  have  realized. 
Those  who  intended  to  subscribe  had  accom 
plished  comparatively  little  by  obtaining  receipts  or 
state  notes  ;  it  was  still  necessary  to  go  to  the  Hotel 
de  Severs,  where  the  subscriptions  were  received. 
The  entrances  there  were  crowded  to  suffocation. 
The  hall  servants  made  considerable  sums  by  sub 
scribing  for  those  who  could  not  get  through  the 
crowd  to  the  offices.  Some  adventurers,  assuming 
the  livery  of  Law,  performed  this  service,  charging 
and  obtaining  a  very  large  fee.  The  most  humble 
employees  of  the  company  became  patrons  who 
were  very  much  courted.  As  to  the  higher  officers, 
and  Law  himself,  they  received  as  much  adulation 
as  if  they  were  the  actual  dispensers  of  the  favors 
of  fortune.  The  approaches  to  Law's  residence  were 
encumbered  with  carriages.  All  that  was  most 
brilliant  among  the  nobility  of  France  came  to  beg 
humbly  for  the  subscriptions,  which  were  already 
much  above  the  nominal  price  of  shares,  and  which 
were  sure  to  rise  much  higher.  By  a  clause  of  the 
decree  creating  the  company,  the  ownership  of  the 
shares  entailed  nothing  derogatory  to  rank.  The 
nobility,  therefore,  could  indulge  in  this  speculation 
without  endangering  its  titles.  It  was  as  much  iu 


92  MEMOIR  OP  JOHN   LAW. 

debt  as  the  king,  thanks  to  its  prodigality  and  the 
long  wars  of  that  century,  and  it  sought  to  win,  at 
least,  the  amount  of  its  debts  by  fortunate  specula 
tions.  It  surrounded,  it  fawned  upon  Law,  who, 
very  anxious  to  gain  partisans,  reserved  very  few 
shares  for  himself,  but  distributed  them  among  his 
friends  of  the  court. — (NOTE  4.) 

The  new  subscription  was  also  taken  up  ,in  a  few 
days.  If  we  reflect  that  fifty  millions  in  cash  was 
sufficient  to  secure  five  hundred  millions  of  each 
issue,  we  shall  understand  how  the  state  notes  which 
remained  in  the  market,  and  the  receipts  already 
delivered,  would  suffice  to  monopolize  the  shares 
offered  to  the  public.  The  creditors  who  had  not 
liquidated  their  claims,  and  the  greater  number  had 
not,  could  not  avail  themselves  of  the  right  to  sub- 
scribejbr  shares,  and  were  obliged  to  buy  them  in 
the  market  at  an  exorbitant  price.  The  shares 
subscribed  for  at  the  Hotel  de  Severs  for  five  thou 
sand  francs,  were  resold  in  the  rue  Quincampoix 
for  six,  seven,  and  eight  thousand  francs.  To  the 
need  of  having  some  of  this  investment,  was  joined 
the  hope  of  seeing  the  shares  rise  in  the  market  to 
an  indefinite  extent,  and  it  is  not  surprising  that 
the  eagerness  to  obtain  them  soon  increased  to 
frenzy.  In  order  to  satisfy  this  demand,  a  third  sub 
scription  was  opened  on  the  second  of  October, 


MOMENTARY    FLUCTUATION.  93 

three  days  after  the  second.  Similar  in  every  res 
pect  to  the  first  two,  it  ought  to  bring  in  a  capital 
of  five  hundred  millions  and  complete  the  fifteen 
hundred  millions  which  the  company  needed  to 
redeem  the  public  debt. 

The  concourse  of  people  was  as  great  as  ever  at  the 
treasury  where  the  receipts  were  given,  and  at 
the  Hotel  de  JSTevers,  where  the  applications  for 
shares  were  received.  The  occasion  of  this  eager 
ness  is  evident,  since  that  which  was  obtained 
at  the  Hotel  de  Severs  for  five  thousand  francs  was 
worth  seven  and  eight  thousand  in  the  rue  Quin- 
campoix.  This  new  issue  at  five  thousand  francs 
caused  the  rates  in  the  rue  Quincampoix  to  dimin 
ish  ;  in  an  instant  they  were  below  five  thousand 
francs — even  as  low  as  four  thousand — so  blind 
were  these  movements,  and,  so  to  speak,  con 
vulsive,  doiring  this  period  of  feverish  excitement. 
There  was  no  possible  reason  for  selling  in  one  place 
for  four  thousand  francs,  that  for  which  they 
paid  five  thousand  at  another.  But  this  pheno 
menon  lasted  only  a  few  hours ;  the  rates  rose 
again  rapidly,  and  the  subscription  being  taken 
up,  the  shares  sold  again  for  seven  and  eight  thou 
sand  francs.  The  crafty  brokers  had  already 
had  two  opportunities  of  making  some  profitable 
operations. 


94:  MEMOIR   OF  JOHN   LAW. 

Having  obtained  the  state  notes  at  a  very 
small  price,  they  procured  shares  at  the  most 
moderate  rates,  between  five  hundred  and  a  thou 
sand  francs ;  then  they  sold  them  for  from 
seven  to  eight  thousand  francs;  and  the  second 
of  October,  the  day  of  the  decline,  they  repurchased 
them  for  four  thousand,  to  sell  them  again  the  next 
day  for  seven  or  eight  thousand.  It  will  be  seen' 
how  they  must  have  made  money,  with  these  op 
portunities. 

It  was  no  longer  a  few  scattered  groups  which 
were  seen  in  the  rue  Quincampoix,  but  a  compact 
crowd  engaged  in  speculating  from  morning  till 
night.  The  subscriptions  had  been  divided  into 
coupons,  transferable,  like  notes,  to  the  bearer  by 
an  indorsement  simply  formal.  During  the  course 
of  October  the  shares  had  already  risen  above  ten 
thousand  francs,  and  it  was  impossible  to  know 
where  they  would  stop. — (NOTE  3.) 


NOTES  TO  CHAPTER  IV. 

SITUATION   OF   FBANCE. 

(1.)  IT  was  now  that  the  frenzy  of  speculating 
began  to  seize  upon  the  nation.  Law's  bank  had 
effected  so  much  good,  that  any  promises  for  the 
future  which  he  thought  proper  to  make  were 
readily  believed.  The  regent  every  day  conferred 
new  privileges  upon  the  fortunate  projector.  The 
bank  obtained  the  monopoly  of  the  sale  of  tobacco, 
the  sole  right  of  refinage  of  gold  and  silver,  and  was 
finally  erected  into  the  Royal  Bank  of  France. 
Amid  the  intoxication  of  success,  both  Law  and  the 
regent  forgot  the  maxim  so  loudly  proclaimed  by 
the  former,  that  a  banker  deserved  death  who  made 
issues  of  paper  without  the  necessary  funds  to  pro 
vide  for  them.  As  soon  as  the  bank,  from  a  private, 
became  a  public  institution,  the  regent  caused  a 
fabrication  of  notes  to  the  amount  of  one  thousand 
millions  of  livres.  This  was  the  first  departure  from 
sound  principles,  and  one  for  which  Law  is  not 
justly  blamable.  While  the  affairs  of  the  bank 

95 


yb  MEMOIR   OF   JOHN   LAW. 

were  under  his  control,  the  issues  had  never 
exceeded  sixty  millions.  Whether  Law  opposed 
this  inordinate  increase  is  not  known;  but,  as  it 
took  place  as  soon  as  the  bank  was  made  a  royal 
establishment,  it  is  but  fair  to  lay  the  blame  of 
change  of  system  upon  the  regent. — MACKAY. 

(2.)  The  public  enthusiasm,  which  had  been  so 
long  rising,  could  not  resist  a  vision  so  splendid. 
At  least  three  hundred  thousand  applications  were 
made  for  the  fifty  thousand  new  shares,  and  Law's 
house  in  the  rue  de  Quincampoix  was  beset  from 
morning  to  night  by  the  eager  applicants. — 
MACKAY. 

(3.)  The  situation  of  France,  in  November,  1719, 
is  thus  described  by  a  contemporary  writer :  "  The 
bank  notes  were  just  so  much  real  value  which 
credit  and  confidence  had  created  in  favor  of  the 
state.  Upon  their  appearance,  plenty  immediately 
displayed  herself  through  all  the  towns  and  all  the 
country;  she  relieved  our  citizens  and  laborers 
from  the  oppression  of  debts  which  indigence  had 
obliged  them  to  contract ;  she  enabled  the  king  to 
liberate  himself  from  great  part  of  his  debts,  and  to 
make  over  to  his  subjects  more  than  fifty-two  mil 
lions  of  livres  of  taxes  which  had  been  imposed  in 


PROSPERITY    PRODUCED    BY   BANK.  97 

the  years  preceding  1719  ;  and  more  than  thirty- 
five  millions  of  other  duties  extinguished  during  the 
regency.  This  plenty  sunk  the  rate  of  interest, 
crushed  the  usurer,  carried  the  value  of  lands  to  80 
and  100  years'  purchase,  raised  up  stately  edifices 
both  in  town  and  country,  repaired  the  old  houses 
which  were  falling  to  ruin,  improved  the  soil, 
gave  an  additional  relish  to  every  fruit  produced 
by  the  earth.  Plenty  recalled  those  citizens  whom 
misery  had  forced  to  seek  their  livelihood  abroad. 
In  a  word,  riches  flowed  in  from  every  quarter; 
gold,  silver,  precious  stones,  ornaments  of  every 
kind  which  contribute  to  luxury  and  magnificence, 
came  to  us  from  every  country  in  Europe.  Whether 
these  prodigies  or  marvellous  effects  were  produced 
by  art,  by  confidence,  by  fear,  or  by  whim,  if  you 
please,  one  must  agree,  that  that  art,  that  confi 
dence,  that  fear,  or  that  whim,  had  operated  all 
these  realities,  which  the  ancient  administration 
never  could  have  produced.  Thus  far  the  system 
had  produced  nothing  but  good;  everything  was 
commendable  and  worthy  of  admiration.  —  WOOD. 


To  the  eyes  of  the  wondering  crowd,  the 
author  of  such  prodigies  was,  during  some  time,  a 
chimerical  being,  superhuman,  a  demigod  in  whose 
honor  a  sort  of  worship  was  cultivated.  The  Aca- 

5 


98  MEMOIR   OF   JOHN   LAW. 

demy  of  Science  elected  him  one  of  its  members. 
As  lie  passed  through  the  streets  people  cried, 
"  Long  live  the  King  and  Monseigneur  Law !"  He 
was  overwhelmed  with  supplicating  flatteries  in 
prose  and  verse.  His  very  servants  were  courted, 
and  gentlemen  assumed  his  livery  to  introduce 
themselves  into  the  bank  or  to  have  more  credit  in 
the  rue  Quincampoix.  Women,  sad  to  relate,  distin 
guished  themselves  by  their  adulations  and  base 
ness.  The  regent's  mother  wrote  to  a  friend  that 
"  Law  was  so  beset  that  he  had  no  repose,  night  or 
day.  A  duchess  kissed  his  hand  before  a  crowd  of 
people.  If  a  duchess  will  kiss  his  hand,  what  will 
not  other  women  kiss  ?"  Like  Midas,  whose  touch 
converted  everything  into  gold  and  almost  caused 
him  to  die  of  hunger,  the  financier  no  longer  had 
time  to  live.  Badgered  in  every  saloon  where  he 
showed  himself,  pursued  in  the  streets,  tracked  to 
his  private  apartments  by  women  who  intruded 
themselves  by  force  or  by  fraud,  and  waited  day 
and  night  till  they  met  their  victim,  poor  Law  saw 
countesses  and  marquesses  ready  to  spring  upon 
him  at  times  when  decency  even  required  a  solitary 
retirement. — COCHUT. 


CHAPTER  V. 

Mistake  in  the  details  of  the  execution  of  Law's  project — New  privi 
leges  granted  to  the  company — Speculation  attracts  all  classes 
and  affects  all  kinds  of  business — Foreigners  arrive — Tricks  of 
the  brokers — Fortunes  made  in  a  few  hours — Actual  value  of  the 
shares — Law  idolized — Anecdotes — His  conversion — Courted  by 
foreign  governments — Continued  success  of  the  bank — Excessive 
luxury  of  speculators — Income  of  the  company. 


CHAPTEK   Y. 

FEW  explanations  are  necessary  to  expose  the 
mistake  committed  by  Law  in  the  execution  of  his 
project.  Nothing  was  more  admissible  or  more 
practicable  than  the  conversion  of  the  whole  capi 
tal  of  the  public  debt  from  one  kind  of  stock  to 
another.  The  state  might  make  a  saving  by  doing 
so,  and  the  creditors  could  lose  nothing ;  but  the 
greatest  precautions  were  necessary  to  accomplish 
this  conversion  without  confusion  or  disorder.  Unfor 
tunately  none  of  these  precautions  were  taken,  and 
we  are  overwhelmed  with  astonishment  at  the 
manner  in  which  Law  conducted  this  important 
operation.  He  had  first  advertised  the  redemption 
of  the  public  debt  by  the  Indian  Company  ;  he  had 
suffered  the  shares  to  rise  as  high  as  five  thousand 
francs,  so  that  the  holders  of  the  first  made  ten  to 
one  on  their  capital,  and  what  they  obtained  for 
five  hundred  and  a  thousand  francs  the  creditors  of 
the  state  paid  five  thousand  for.  He  had  then  de 
cided  to  open  new  subscriptions,  and  opened  them 
before  the  creditors  had  taken  their  receipts,  and 


101 


102  MEMOIR   OF   JOHN   LAW. 

consequently  before  their  securities  were  in  a  dis 
posable  form.  He  had  then  granted  such  terms 
that  those  who  were*  most  alert  had  the  advantage 
of  the  others,  and  one  hundred  and  fifty  millions 
sufficed  to  engross  the  stock  of  fifteen  hundred  mil 
lions.  Then  Law  had  offered  the  subscriptions  at 
three  different  times,  as  if  he  wished  to  stimulate 
the  eagerness  to  buy  by  satisfying  it  only  lit 
tle  by  little.  With  such  management  it  was 
natural  that  the  subscriptions  should  be  snatched 
at,  and  that  the  movement,  which  should  have 
been  quiet  and  steady,  became  precipitate  and 
violent. 

The  precautions  which  ought  to  have  been  taken 
are  obvious.  The  shares  should  not  have  been  suf 
fered  to  rise  to  five  thousand  francs,  for  this  per 
mitted  the  holders  of  the  first  shares  to  make  an 
unfair  profit  at  the  expense  of  the  creditors  of  the 
state.  The  subsequent  subscriptions  should  not  have 
been  opened  before  all  the  receipts  had  been  deliv 
ered,  so  that  not  one  of  the  creditors  should  have 
cause  to  complain.  It  should  have  been  declared 
also,  on  the  first  day,  that  receipts  and  state  notes 
alone  would  be  received  in  payment  for  shares, 
so  that  speculators  who  had  none  of  the  public  debt 
should  not  have  the  power  of  taking  shares  without 
first  purchasing  securities  from  the  actual  creditors 


A   GKEAT   MISTAKE.  103 

of  the  state.  Lastly,  in  order  to  give  all  the  cre 
ditors  an  opportunity  to  subscribe,  the  right  of 
paying  by  installments  should  not  have  been 
granted ;  this  would  have  prevented  the  fifteen 
hundred  millions  of  stock  being  taken  up  with  one 
hundred  and  fifty  millions  of  capital. 

None  of  these  precautions  were  taken,  as  we 
have  just  seen.  The  reason  assigned  for  granting 
the  right  of  payment  by  installments  was  that  the 
claims  of  creditors  could  not  all  be  liquidated  im 
mediately — it  must  be  done  gradually.  This  rea 
son  would  have  been  sound  if  each  creditor  paying 
for  his  shares  by  installments  of  one-tenth,  accord 
ing  to  the  terms  of  subscriptions,  had  received  his 
receipts  in  the  same  proportion.  But  each  creditor 
received  the  whole  of  his  claim  at  once,  and  thus 
the  first  comer  had  an  advantage.  Beside,  the 
state  notes,  all  transferable  and  in  the  market,  had 
an  immense  advantage  over  the  receipts,  which  oc 
casioned,  as  we  have  seen,  some  fraudulent  transac 
tions.  The  requirement  that  the  payment  should 
be  made  in  receipts,  or  in  state  notes,  was  offered 
in  excuse,  because  it  must  sooner  or  later  bring  the 
shares  or  their  value  into  the  hands  of  the  creditors, 
since  the  subscribers  would  be  compelled  to  buy  the 
receipts  of  the  creditors  at  a  price  proportionate  to 
the  price  of  the  shares,  or  to  abandon  the  shares  to 


104  MEMOIR    OF    JOHN    LAW. 

them  at  a  reduced  rate  for  want  of  the  necessary 
paper  to  purchase  with.  This  would  be  a  good  ex 
cuse  if  the  provision  had  been  adopted  the  first  day  ; 
but  when  it  was  thought  of,  a  disordered  movement 
was  already  produced  in  the  price  of  the  shares, 
and  there  was  no  means  either  of  arresting  or  mode 
rating  the  agitation. 

None  of  these  much-needed  precautions  were 
taken.  Law,  absorbed  by  the  obstacle  to  be  over 
come  in  order  to  insure  the  success  of  his  plan, 
aimed  only  to  dazzle  the  world  by  a  prodigious 
success,  and  had  done  everything  to  stimulate 
subscribers,  instead  of  doing  everything  to  restrain 
them. 

This  dangerous  success  went  on  constantly  in 
creasing  to  the  end  of  October  and  beginning  of 
November  of  1719.  Law,  carried  away  as  much  as 
the  public,  neglected  nothing  to  enlarge  the  func 
tions  of  the  company.  He  had  the  revenue  on 
tobacco  assigned  to  the  company  for  one  hundred 
millions  in  addition  to  what  it  had  lent  to  govern 
ment,  and  which  served  to  redeem  four  millions  of 
pensions  secured  upon  this  revenue.  The  company 
receiving  only  three  per  cent.,  or  three  millions,  it 
was  a  saving  of  a  million  to  the  government.  The 
regent  took  the  occasion  of  this  economy  to  abolish 
the  duties  on  tallow,  oil,  fish,  etc.,  which  gave  great 


EXCITEMENT   OF   THE   PARISIANS.  105 

joy  to  the  people  of  Paris  and  singularly  increased 
the  popularity  of  the  system. 

It  was  no  longer  only  the  professional  speculators 
and  creditors  of  the  government  who  frequented 
the  rue  Quincampoix,  all  classes  of  society  mingled 
there,  cherishing  the  same  illusions — noblemen, 
famous  on  the  field  of  battle,  distinguished  in  the 
government — churchmen,  traders,  quiet  citizens, 
servants  whom  their  suddenly  acquired  fortune  had 
filled  with  the  hope  of  rivalling  their  masters.  All 
the  houses  in  the  street  had  been  converted  into 
offices  by  the  stock-jobbers ;  the  occupants  gave  up 
their  apartments,  the  merchants  their  shops ;  houses 
which  had  brought  a  rent  of  seven  or  eight  hundred 
francs  were  cut  up  into  some  thirty  offices,  and 
brought  fifty  or  sixty  thousand  francs ;  stock 
jobbing  made  itself  felt  in  rents  as  in  securi 
ties.  A  cobbler  who  had  converted  his  stall  into 
an  office  by  placing  in  it  some  stools,  a  table  and 
a  writing-desk,  rented  it  for  two  hundred  francs 
a  day. — (NOTES  4,  5—10.) 

The  shops  had  been  changed  into  cafes  and 
restaurants ;  a  portion  of  the  Parisians  had  almost 
transferred  their  residences  to  this  quarter;  they 
came  there  at  daybreak,  breakfasted  there,  dined 
there,  and,  when  the  fever  of  speculation  had  sub 
sided,  passed  the  afternoon  at  cards.  Numerous 

5* 


106  MEMOIR   OF   JOHN   LAW. 

equipages,  awaiting  their  owners,  obstructed  the 
streets  of  St.  Denis  and  St.  Martin,  parallel  to  the 
rue  Quincampoix. 

A  large  number  of  provincials  and  foreigners 
were  added  to  the  population  of  Paris,  especially 
those  from  the  important  cities  of  Europe.  Many 
did  not  dare  to  operate  for  themselves,  either  from 
timidity  or  from  want  of  experience,  and  they  em 
ployed  the  intrepid  brokers  formed  under  the  last 
reign  to  operate  for  them.  These  brokers  had 
organized  themselves  into  regular  swindling  com 
panies.  They  speculated  upon  the  constant  rise, 
but  more  often  still  upon  the  fluctuations  which 
they  had  the  skill  to  produce.  They  ranged  them 
selves  in  a  line  in  the  rue  Quincampoix,  ready  to 
act  at  the  first  signal.  At  the  sound  of  a  bell  in  the 
office  of  a  man  named  Papillon,  they  offered,  all  at 
once,  the  shares,  sold  them,  and  effected  a  decline. 
At  a  different  signal,  they  bought  at  the  lowest 
price  that  which  they  had  sold  at  the  highest,  and 
in  this  way  brought  about  a  reaction;  thus  they 
always  "  sold  dear  and  bought  cheap."  The  fluctua 
tions  were  so  rapid  and  so  considerable,  that 
brokers  receiving  shares  to  sell  had  time  to  make 
large  profits  by  retaining  them  only  one  day.  One 
is  mentioned  who,  commissioned  to  sell  some  shares, 
was  absent  two  days.  It-  was  thought  that  he  had 


A   SEA   OF   SPECULATION.  107 

stolen  them.  Not  at  all;  lie  repaid  the  price  of 
them  faithfully,  but  meanwhile  he  had  made  a  mil- 
lion»for  himself. 

This  power  which  capital  had  acquired  of  realiz 
ing  such  quick  profits,  had  originated  a  special 
business.  Money  was  lent  by  the  hour  and  at  an 
unexampled  interest.  The  stock-jobbers  not  only 
found  means  to  pay  the  interest  demanded,  but  also 
made  notable  profits  for  themselves.  A  million 
francs  were  sometimes  made  in  one  day.  It  is  not 
astonishing,  then,  that  servants  became  suddenly 
as  rich  as  their  masters.  One  of  them,  meeting  his 
master  walking  in  the  rain,  stopped  his  carriage  to 
offer  him  a  seat. 

The  rue  Quincampoix  was  called  the  Mississippi. 
Every  day  industrious  mechanics  and  quiet  gentle 
men  abandoned  their  labor  or  the  enjoyment  of 
their  peaceable  competency  to  embark  on  this  tem 
pestuous  sea.  Their  number  constantly  increased, 
and  in  November  all  were  under  the  fascination  of 
this  wild  illusion.  At  this  time  the  shares  were 
quoted  at  fifteen  thousand  francs,  or  thirty  times 
the  original  price.  No  one  stopped  to  ask  what 
was  the  foundation  of  this  enormous  wealth ;  no  one 
reflected  that  paper  had  no  value,  except  as  repre 
senting  realities,  and  that  the  shares  really  repre 
sented  the  following  values : 


108  MEMOIR   OF   JOHN   LAW. 

100,000,000  francs  for  the  first  issue  of  shares 

to  the  number  of 200,000 

27,600,000  francs  for  the  second  issue  of  shares 

to  the  number  of 50,000 

50,000,000  francs  for  the  third  issue  of  shares 

to  the  number  of 50,000 

1,500,000,000  francs  for  the  last  issue  of  shares 

to  the  number  of 300,000 


1,677,500,000  francs  for  the  four  issues,  making 

a  total  of 600,000 

While  the  six  hundred  thousand  shares  repre 
sented,  in  fact,  the  sum  of  one  billion  six  hundred 
and  seventy-seven  million  five  hundred  thousand 
francs,  they  had  risen,  at  the  price  of  fifteen  thou 
sand  francs,  to  represent  a  sum  amounting  to  nine 
billions.  Had  the  commerce  of  all  the  Indies  ever 
produced  profits  to  justify  such  a  rise  in  the  capital 
and  to  pay  a  proportionate  interest?  Had  it, 
for  example,  produced  four  hundred  and  fifty  mil 
lions  in  a  year,  so  as  to  have  paid  five  per  cent.,  at 
least,  upon  the  capital  so  suddenly  created  ?  ~No  one 
asked  himself  these  questions.  Every  one  seemed 
to  think,  with  Law,  that  all  wealth  was  in 
money ;  that  paper  could  take  the  place  of  it,  and 
that  the  shares  were  really  worth  their  market 
price. 

Law  was  idolized.     The  nobility  filled  his  ante- 


UNIVERSAL    ENTHUSIASM.  109 

chambers.  One  of  his  old  friends,  being  in  his  pri 
vate  apartments,  saw  him  go  through  some  long 
calculations,  breakfast,  then  play  at  faro,  while  a 
crowd  of  noblemen  patiently  waited  for  him.  There 
was  no  insolence  in  this  ;  but  he  could  not  have  at 
tended  to  the  indispensable  duties  of  life  if  he  had 
yielded  to  the  universal  enthusiasm  for  him.  A 
lady  had  her  carriage  overturned  beneath  his  win 
dows  to  compel  him  to  show  himself.  Law  had 
lost  none  of  his  original  modesty ;  but  his  wife,  less 
intelligent  than  he,  could  not  conceal  the  self-con 
ceit  of  a,  parvenu,  and  manifested  impertinently  the 
annoyance  which  the  assiduities  of  her  flatterers 
occasioned  her.  The  son  of  Law  was  admitted  to 
dine  with  the  king,  who  was  the  same  age;  his 
daughter,  scarcely  eight  years  old,  gave  a  ball  at  her 
house.  The  most  brilliant  of  the  nobility  sued  for 
the  honor  of  an  invitation  to  this  fete  given  by  a 
child.  The  papal  nuncio  arrived  among  the  first, 
seized  the  young  mistress  of  the  house  in  his  arms, 
and  overwhelmed  her  with  caresses.  Dukes  and 
princes  sought  the  hand  of  this  little  girl,  scarcely 
out  of  the  cradle. — (NOTES  3,  T,  8,  9.) 

The  regent,  charmed  like  every  one  else,  removed 
M.  d' Argenson  from  the  Treasury  to  give  it  to  Law. 
He  being  a  protestant,  the  Abbe  de  Tencin  was 
commissioned  to  convert  him.  The  neighboring 


110  MEMOIR   OF  JOHN   LAW. 

governments  could  not  but  feel  some  disquietude  at 
the  apparent  financial  power  and  strength  of 
France.  England  wished  to  temporize  with  Law, 
who  had  retained  a  lively  resentment  against  his 
own  country.  The  impetuous  Stair,  the  English 
ambassabor,  who  had  offended  Law,  was  recalled. 
Facts  like  these  show  the  influence  which  Law  com 
manded  in  France  and  in  Europe.  It  appears  that, 
notwithstanding  the  superiority  of  his  intelligence, 
he  himself  shared  the  general  intoxication.  He 
purchased  estates  in  France,  took  no  precaution  to 
secure  a  fortune  abroad,  and  there  is  nothing  to 
indicate  that  he  foresaw  his  sad  approaching  fate. 
—(NOTES  1,  2,  4.) 

While  the  shares  of  the  company  rose  so  high, 
the  notes  of  the  bank  had  no  less  success.  The 
bank  remained  still  separate  from  the  company. 
The  convenience  of  the  notes  in  the  quick  transac 
tions  of  the  rue  Quincampoix,  made  them  very 
much  in  demand.  Large  amounts  of  gold  and  sil 
ver  were  deposited  to  procure  them,  and  they  had 
even  come  to  be  worth  ten  per  cent,  more  than 
coin.  The  bank  had  been  obliged  to  issue  as  much 
as  six  hundred  and  forty  millions  at  a  time.  How 
ever,  they  were  not  so  generally  diffused  through 
the  provinces  as  at  Paris,  because  they  were  not 
needed  there  for  stock-jobbing  transactions.  Law 


FORCING    THE   CIRCULATION.  Ill 

wished  to  supply  what  was  wanting  to  their  success 
in  the  provinces  by  a  decree  of  the  1st  of  Decem 
ber,  1719,  by  which  the  conversion  of  gold  and 
silver  into  bank  notes  was  forbidden  in  Paris  and 
authorized  in  the  provinces  alone.  The  revenue 
also  must  be  paid  in  bank  notes,  and  creditors  were 
empowered  to  insist  upon  payment  in  the  same 
form.  The  intention  of  the  edict  is  apparent;  the 
issue  of  notes  being  arrested  in  Paris,  where  it  had 
become  excessive,  the  source  from  which  they  were 
obtained  was  transported  to  the  provinces :  beside, 
the  collection  of  the  taxes  in  notes  and  the  power 
given  to  creditors  to  demand  payment  in  that  money 
must  contribute  to  expand  their  circulation  to  the 
remotest  extremities  of  the  country.  It  is  true  that 
the  circulation  of  the  notes  was  not  forced,  for  that 
would  have  required  every  one  to  receive  them  ;  but 
as  they  were  worth  more  than  specie,  the  authoriz 
ing  everybody  to  demand  them  was  to  oblige  every 
body  to  have  them.  Thus  Law  already  adopted 
forced  measures  to  extend  the  success  of  the  bank 
into  the  provinces. 

The  month  of  December  was  the  time  of  the 
greatest  infatuation.  The  shares  ended  by  rising  to 
eighteen  and  twenty  thousand  francs — thirty-six 
and  forty  times  the  first  price.  Everything  had 
been  systematized  in  the  rue  Quincampoix.  Guards 
were  placed  at  botli  extremities  of  the  street;  a 


112  MEMOIR   OF   JOHN   LAW. 

commission  had  been  appointed  to  settle  all  disputes 
summarily.  The  concourse  of  speculators  constantly 
increased.  People  from  every  quarter  rushed  to 
this  general  rendezvous  of  fortune.  Creditors 
brought  the  sums  received  from  their  debtors;  pro 
prietors  brought  the  value  of  their  estates,  and 
ladies  that  of  their  diamonds.  The  Mississippians 
began  to  abandon  themselves  to  the  pleasures  and 
dissipations  which  attend  suddenly  acquired  fortunes. 
The  regent  freed  from  his  cares,  the  nobility  believ 
ing  itself  wealthy,  the  brokers  possessing  immense 
quantities  of  paper,  indulged  in  every  kind  of 
debauchery.  The  shops  in  the  rue  St.  Honore, 
commonly  filled  with  the  richest  stuffs,  were 
emptied ;  the  cloth  of  gold  had  become  extremely 
scarce — it  was  seen  in  the  streets  worn  by  all  sorts 
of  people.  An  unheard-of  number  of  equipages 
paraded  the  capital ;  the  streets  St.  Denis  and  St. 
Martin,  contiguous  to  the  rue  Quincampoix,  were 
so  blocked  up  by  the  carriages  of  rich  Mississip- 
pians  that  the  merchants  complained  to  the  regent 
that  they  seriously  interfered  with  their  trade. — 
(NOTES  6,  11.) 

So  unnatural  a  state  of  things  could  not  last  long. 
Before  Law  had  made  his  system  complete,  before 
he  had  given  the  company  the  last  privileges  which 
he  had  designed  for  it,  and  had  united  it  with  the 
bank,  the  shares  were  to  suffer  a  frightful  decline. 


FICTION    CONTRASTED   WITH   FACTS.  113 

At  the  price  which  they  had  attained,  the  six  hun 
dred  thousand  shares  represented  a  capital  of  ten 
or  twelve  billions.  The  only  means  of  sustaining 
this  absurd  fiction  would  have  been  to  pay  a  pro 
portionate  interest  to  the  shareholders,  and  four^» 
&aft  millions  of  income  would  have  been  required  to 
insure  four  per  cent.  only.  The  income  of  the  com 
pany  was  as  follows : 

From  the  collection  of  the  national  revenue  for  the 

interest  on  1,600,000,000,  of  the  public  debt  . .  48,000,000 

Profits  on  farming  the  revenue 15,000,000 

Profits  on  the  general  receipts 1,500,000 

Profits  on  tobacco 2,000,000 

Profits  on  coining  the  money 4,000,000 

Profits  from  commerce 10,000,000 


Total 80,500,000 

This  income  would  have  allowed  a  dividend  of 
five  per  cent,  at  most  upon  the  actual  capital  of  one 
billion  six  hundred  and  seventy-seven  millions. 
How  was  it  possible  to  provide  even  a  moderate 
income  for  a  capital  of  ten  billions,  and  thus  to  give 
it  some  reality  ? 

The  exaggeration  of  the  price  must  cease  at  the 
moment  when  the  fiction  was  contrasted  with  facts, 
and  this  would  be  when  the  shareholders  attempted 
to  realize  their  fortune,  whether  to  insure  it  or  to 
enjoy  it. 


NOTES  TO  CHAPTEE  Y. 

ANECDOTES   OF  LAW. 

(1.)  Law  was  now  made  comptroller  general  of 
the  finances,  precisely  at  the  time  when  it  was  im 
possible  that  he  could  fill  the  duties  of  the  position ; 
at  the  period  of  the  subversion  of  private  fortunes 
and  the  public  finances.    People  saw  him  converted 
in  a  short  time  from  a  Scotchman  to  a  naturalized 
Frenchman,  from  a  Protestant  to  a  Catholic,  from 
a  needy  adventurer  to  a  lord  of  magnificent  estates, 
from  a  banker  to  a  minister  of  state.     I  have  seen 
him  arrive  in  the  saloons  of  the  Palais  Royal  fol 
lowed  by  dukes,   lords,   marshals   of  France   and 
bishops.     At  last,  in  the  same  year,  Law,  loaded 
with  public  execration,  was  compelled   to  fly  the 
country  which  he  had  wished  to  enrich  and  in  which 
he  had  produced  such  disorders. — VOLTAIKE. 

(2.)  At  this  time  he  was  by  far  the  most  influen 
tial  person  of  the  state.  The  Duke  of  Orleans 
had  so  much  confidence  in  his  sagacity  and  the  suc- 

114 


TREATMENT   OF   THE   NOBILITY.  115 

cess  of  his  plans,  that  he  always  consulted  him  upon 
every  matter  of  moment.  He  was  by  no  means 
unduly  elevated  by  his  prosperity,  but  remained  the 
same  simple,  affable,  sensible  man  that  he  had 
shown  himself  in  adversity.  His  gallantry,  which 
was  always  delightful  to  the  fair  objects  of  it,  was 
of  a  nature  so  kind,  so  gentlemanly,  and  so  respect 
ful,  that  not  even  a  lover  could  have  taken  offence 
at  it.  If,  upon  any  occasion,  he  showed  any 
symptoms  of  haughtiness,  it  was  to  the  cringing 
nobles  who  lavished  their  adulation  upon  him  till  it 
became  fulsome.  He  often  took  pleasure  in  seeing 
how  long  he  could  make  them  dance  attendance 
upon  him  for  a  single  favor.  To  such  of  his  own 
countrymen  as  by  chance  visited  Paris,  and  sought 
an  interview  with  him,  he  was,  on  the  contrary,  all 
politeness  and  attention. — MACKAY. 

(3.)  Peers,  whose  dignity  would  have  been  out 
raged  if  the  regent  had  made  them  wait  half  an 
hour  for  an  interview,  were  contented  to  wait  six 
hours  for  the  chance  of  seeing  Monsieur  Law. 
Enormous  fees  were  paid  to  his  servants,  if  they 
would  merely  announce  their  names.  Ladies  of 
rank  employed  the  blandishment  of  their  smiles  for 
the  same  object ;  but  many  of  them  came  day  after 
day  for  a  fortnight  before  they  could  obtain  an 


116  MEMOIJK   OF   JOHN   LAW. 

audience.  When  Law  accepted  an  invitation,  lie 
was  sometimes  so  surrounded  by  ladies,  all  asking 
to  have  their  names  put  down  in  his  lists  as  share 
holders  in  the  new  stock,  that,  in  spite  .of  his  well- 
known  and  habitual  gallantry,  he  was  obliged  to 
tear  himself  away  par  force.  —  MACKAY. 


A  British  nobleman,  who  then  visited  Paris, 
said,  in  a  public  advertisement,  that  Mr.  Law 
appeared  a  minister  far  above  all  the  past  age  had 
known,  the  present  could  conceive,  or  the  future 
could  believe  ;  that  he  had  established  public  credit 
in  a  country  that  was  become  a  proverb  for  the 
breach  of  it  ;  and  that  he  had  shown  the  French 
people  that  Louis  XIY.  was  not  able,  with  his 
unlimited  authority,  to  take  away  more  from,  than 
he  had  restored  to,  them.  Madame  de  la  Chaumont 
having  been  detected  in  illicit  practices  against  the 
revenue,  was  drawn  out  of  the  scrape  by  the  exer 
tions  of  one  of  the  contractors  for  supplying  the 
French  army  with  provisions.  This  acceptable 
piece  of  service  led  her  to  support  their  interest 
with  so  much  warmth,  that  she  soon  found  her 
self  engaged  for  them  in  the  sum  of  1,400,000 
livres,  advanced  by  herself,  and  borrowed  from 
her  relations  and  neighbors.  Coming  from  Paris 
to  solicit  payment,  she  was  forced  to  accept  of 


A   FRIGHTENED   PATIENT.  117 

that  sum  in  billets  d'etat,  although  they  were 
then  at  sixty  per  cent,  discount.  Unwilling  to  re 
turn  to  Namur  with  less  than  would  satisfy  her 
creditors,  and  resolving  to  risk  everything  to  accom 
plish  that  object,  she  laid  out  the  whole  in  the  pur 
chase  of  shares  of  the  India  Company  immediately 
on  its  institution,  which  happened  just  at  that 
period,  and,  consequently,  became  enriched  beyond 
her  utmost  expectations. 

Mr.  Chiral,  principal  physician  to  the  regent,  on 
his  way  to  visit  a  female  patient,  having  been  in 
formed  that  the  price  of  actions  was  falling,  was  so 
affected  by  that  piece  of  news  that  he  could  think 
of  nothing  else;  and,  accordingly,  while  holding 
the  lady's  pulse,  kept  exclaiming,  "  O  good  God !  it 
falls,  it  falls !"  The  invalid,  naturally  alarmed, 
began  to  ring  the  bell  with  all  her  force,  crying  out 
that  she  was  a  dead  woman,  and  had  almost  expired 
with  apprehension,  till  the  doctor  assured  her  that 
her  pulse  was  in  a  very  good  state,  but  that  his 
mind  was  so  much  upon  actions,  that  he  came  to 
utter  the  expression  that  terrified  her  in  reference  to 
the  fall  of  their  value.  That  learning  herself  could 
not  shield  her  votaries  from  the  infection,  appears 
from  the  following  circumstance  :M.de  la  Motte 
and  the  Abb 6  Terrasson,  two  of  the  ablest  scholars 
in  France,  conversing  together  on  the  madness  of 


118  MEMOIR   OF   JOHN   LAW. 

the  Mississippi  adventurers,  congratulated  them 
selves  on  their  superiority  over  all  weaknesses  of 
that  nature ;  and  indulged  themselves  in  ridiculing 
the  folly  of  the  votaries  of  the  fickle  goddess.  But 
it  so  happened  that  they  met,  not  long  afterward, 
face  to  face  in  the  rue  Quincampoix ;  at  first,  they 
endeavored  to  avoid  each  other,  but,  finding  that 
impracticable,  put  the  best  look  possible  to  the 
matter,  rallied  each  other,  and  separated  in  order 
to  make  the  most  advantageous  bargains  they 
could. — WOOD. 

(5.)  The  memoirs  of  the  regency  (vol.  ii.  p.  331) 
contain  a  notice  of  a  hump-back  man,  who  in  the 
course  of  a  few  days  acquired  150,000  livres  by  let 
ting  out  his  hump  as  a  writing  desk  to  the  brokers  in 
the  rue  Quincampoix.  A  plan  of  Paris  being  about 
this  time  laid  before  Louis  XY.,  then  only  ten  years 
of  age,  the  young  monarch  found  fault  with  it? 
because  that  street  (rue  Quincampoix),  was  not  dis 
tinguished  from  the  others  by  gilding. — WOOD. 

(6.)  A  footman  had  gained  so  much  that  he  pro 
vided  himself  with  a  fine  carriage ;  but  the  first 
day  it  came  to  the  door,  he,  instead  of  stepping  into 
the  vehicle,  mounted  up  to  his  old  station  behind. 
Another,  in  a  similar  predicament,  brought  himself 


A   MAGNIFICENT   COOK.  119 

well  off  by  pretending  he  got  up  only  to  see  if 
there  was  room  on  the  back  for  two  or  three  more 
lackeys,  whom  he  was  resolved  to  hire  instantly. 
Mr.  Law's  coachman  had  made  so  great  a  fortune 
that  he  asked  a  dismission  from  his  service,  which 
was  readily  granted,  on  condition  of  procuring 
another  as  good  as  himself.  The  man  thereupon 
brought  two  coachmen  to  his  master,  they  were 
both  excellent  drivers,  and  desired  him  to  make 
choice  of  one,  at  the  same  time  saying  that  he 
would  take  the  other  for  his  own  carriage.  One 
night  at  the  opera,  a  Mademoiselle  de  Begond,  ob 
serving  a  lady  enter  magnificently  dressed,  and 
covered  with  diamonds,  jogged  her  mother,  and 
said,  "  I  am  much  mistaken  if  this  fine  lady  is  not 
Mary,  our  cook."  The  report  spread  through  the 
theatre,  till  it  came  to  the  ears  of  the  lady,  who, 
coming  up  to  Madame  de  Begond,  said,  "I  am 
indeed  Mary  your  cook,  I  have  gained  large  sums 
in  the  rue  Quincampoix.  I  love  fine  clothes  and 
fine  jewels,  and  am  accordingly  dressed  in  them. 
I  have  paid  for  everything,  am  in  debt  to  nobody, 
and  pray  what  has  any  person  in  this  place  to  say  to 
this  ?"  At  another  time,  some  persons  of  quality 
beholding  a  gorgeous  figure  alight  from  a  most 
splendid  equipage,  and  inquiring  what  great 
lady  that  was,  one  of  her  lackeys  answered,  "  A 


MEMOIR    OF   JOHN    LAW 

woman  who  has  tumbled  from  a  garret  into  a  car 
riage."  One  of  these  upstarts,  finding  himself 
enriched  beyond  his  utmost  expectations,  hastened 
to  a  coachmaker's  and  ordered  a  berlin  to  be  made 
in  the  finest  taste,  lined  with  the  richest  crimson 
velvet  and  gold  fringe,  and  went  away  after  leav 
ing  4,000  livres  as  earnest.  The  coachmaker  run 
ning  after  him  to  inquire  what  arms  were  to  be  put 
on  the  carriage,  was  answered,  "  Oh,  the  finest— the 
^nest  by  all  means."  A  quondam  footman  sitting 
in  a  newly  acquired  carriage,  having  his  way  im 
peded  by  another  belonging  to  an  officer,  their  ser 
vants  quarrelled,  and  the  former  having  made  use 
of  some  improper  expressions,  the  officer  obliged 
him  to  alight  and  putting  his  hand  to  his  sword, 
the  other  took  to  his  heels,  crying  out,  "  Brethren 
of  the  livery,  come  to  my  assistance." 

But,  perhaps,  the  drollest  circumstance  that  oc 
curred,  was  what  happened  to  one  Brignaud  (son  of  a 
baker  at  Toulouse),  who  being  desirous  of  having  a 
superb  service  of  plate,  purchased  the  whole  articles 
exposed  for  sale  in  the  shop  of  a  goldsmith  for 
400,000  livres,  and  sent  them  home  to  his  wife,  with 
orders  to  set  them  out  properly  for  supper,  to  which 
he  had  invited  many  persons  of  distinction.  The 
lady,  not  understanding  the  business,  arranged  the 
plate  according  to  her  fancy,  and  without  regard  to 


NEW   WINE   IN   OLD   BOTTLES.  121 

their  real  use  ;  so  that  when  supper  was  announced 
the  guests  could  not  forbear  from  indulging  in  peals 
of  laughter  to  see  the  soup  served  up  in  a  basin  for 
receiving  the  offerings  at  church,  the  sugar  in  a 
censer,  and  chalices  holding  the  place  of  salt-cel 
lars,  while  most  of  the  other  articles  were  more 
suited  to  a  toilet  than  a  sideboard. — WOOD. 

(7.)  An  old  lady  who  wished  to  obtain  the  con 
cession  of  some  shares  from  Law  after  the  subscrip 
tion  was  closed,  said  in  her  eagerness,  "  Faites  moi 
wie  conception?  (concession) — (Make  me  a  concep 
tion).  Law  replied,  "  Vous  venez  i/rop  tard^  il  rfy  a 
pas  moyen  d present"  (You  come  too  late,  it  is  no 
longer  possible.) — WOOD. 

(8.)  Some  one  directed  another,  who  was  inquir 
ing  for  a  certain  duchess,  to  Law's  house,  where 
all  the  duchesses  were  sure  to  be  assembled. — 
WOOD. 

(9.)  Law  was  not  exalted  by  the  excessive 
adulation  he  received ;  he  was  simple  and  un 
ostentatious  in  his  style  and  habits. — WOOD. 

(10.)  It  may,  perhaps,  require  some  explanation 
how  so  many  low  persons  should  acquire  large  for 
tunes  from  nothing,  in  so  short  a  time ;  but,  inde- 

6 


122  MEMOIR  OF  JOHN   LAW. 

pendent  of  the  rise  in  the  price  of  actions,  various, 
indeed,  were  the  ways  of  doing  so  during  the  Mis 
sissippi  contagion.  Some,  either  unable  or  unwill 
ing  to  go  to  the  rue  Quincampoix  to  dispose  of 
their  shares,  trusted  them  to  others,  who  received 
orders  to  sell  for  a  certain  sum.  On  their  arrival, 
they  commonly  found  the  price  risen,  and  without 
scruple  put  the  price  in  their  own  pockets.  A  gentle 
man,  falling  sick,  sent  his  servant  to  dispose  of  250 
shares  for  8,000  livres  each ;  and  he  sold  them  at 
the  rate  of  10,000  livres,  making  a  profit  of  500,000 
livres,  which  he  appropriated  to  himself,  and,  by 
other  lucky  adventures,  increased  that  sum  to  up 
wards  of  two  millions.  A  person  deputed  to  sell 
200  shares  for  another,  kept  himself  concealed  for 
some  days,  during  which  time  their  price  rose  so 
high  that  he  cleared  near  a  million  of  livres  of  pro 
fit,  giving  back  to  his  employer,  who  had  been 
hunting  him  in  vain,  only  the  market  rate  of  the 
day  on  which  he  was  sent  to  dispose  of  the  actions. 
One  De  Josier,  trusted  with  the  like  number  of 
shares  to  sell  for  550  livres  each,  disappeared,  but 
coming  back  when  the  system  was  at  its  height, 
profited  immensely. — WOOD. 

(11.)  The  honest  old  soldier,  Marshal  Villars,  was 
so  vexed  to  see  the  folly  which  had  smitten  his 


MARSHAL   VILLAES   DISGUSTED. 


123 


countrymen,  that  he  never  could  speak  with  tem 
per  on  the  subject.  Passing  one  day  through  the 
Place  Vendome  in  his  carriage,  the  choleric  gentle 
man  was  so  annoyed  at  the  infatuation  of  the  peo 
ple,  that  he  abruptly  ordered  his  coachman  to  stop, 
and,  putting  his  head  out  of  the  carriage  window, 
harangued  them  for  full  half  an  hour  on  their  "  dis 
gusting  avarice."  This  was  not  a  very  wise  pro 
ceeding  on  his  part.  Hisses  and  shouts  of  laughter 
resounded  from  every  side,  and  jokes  without  num 
ber  were  aimed  at  him.  There  being  at  last  strong 
symptoms  that  something  more  tangible  was  flying 
through  the  air  in  the  direction  of  his  head,  the  mar 
shal  was  glad  to  drive  on.  He  never  again  repeated 
the  experiment. — MACKAY'S  Popula/r  Delusions. 

(12.)  NUMBER  AND  VALUE  OF  SHARES   ISSUED    BY  THE  COMPANY 
OF  THE  INDIES. 


Successive  emis 
sions. 

Number 
of  shares. 

}j 

Total  price. 

Actual  price 
per  share. 

Actual  price  of 
each  emission. 

1st    Capital  
1st    Subscription.. 
2d 
3d         "        " 
Supplementary  .... 

200,000 
50,000 
50,000 
300,000 
24,000 

500 
500 
500 
500 
500 

100,000,000 
25,000,000 
25,000,000 
150,000,000 
12,000,000 

500 
550 
1,000 
5,000 
5,000 

100,000,000 
27,500,000 
50,000,000 
1,500,000,000 
120,000,000 

624,000 

312,000,000 

1,797,500,000 

Thus  the  company  had  issued  624,000  shares  at 


MEMOIR   OF   JOHN   LAW. 

500  fraftcs  each,  representing  312  million  francs, 
but  profiting  by  the  rise  they  had  sold  them 
for  1,797,500,000  francs.  For  paying  a  divi 
dend  upon  this  enormous  sum,  their  total  probable 
receipts  were  82,000,000,  which  would  have  given 
130  francs  upon  a  share  of  500  francs,  a  magnificent 
result.  But  it  is  to  be  observed  that  the  greater 
part  of  the  subscribers  had  paid  5,000  francs  for 
their  shares  and  to  give  a  dividend  of  4  per  cent, 
per  annum  it  was  necessary  to  make  a  dividend  of 
200  francs  per  share. — COCHUT. 


CHAPTER  VI. 

Extravagant  prices  of  goods — First  decline  of  shares — Drain  of 
specie  from  the  bank — Forced  measures  resorted  to — Attempts 
to  revive  confidence  by  adding  new  functions  to  the  company — 
Letter  to  a  creditor — Panic  increases — Odious  measures— Licen 
tiousness  of  the  rcalizers — Bank  notes  might  and  shotild  have 
been  disconnected  from  the  shares — Violent  and  criminal  plan. 


125 


CHAPTEK  VI. 

THE  end  of  the  month  of  December,  1719,  was 
the  term  of  this  delusion  of  three  months.  A  cer 
tain  number  of  stock-jobbers,  better  advised  than 
others,  or  more  impatient  to  enter  upon  the  enjoy 
ment  of  their  riches,  combined  to  dispose  of  their 
shares.  They  took  advantage  of  the  rage  which  led 
so  many  to  sell  their  estates — they  purchased  them, 
and  thus  obtained  the  real  for  the  imaginary.  They 
established  themselves  in  splendid  mansions,  upon 
magnificent  domains,  and  made  a  display  of  their 
fortunes  of  thirty  or  forty  millions.  They  possessed 
themselves  of  precious  stones  and  jewels,  which 
were  still  eagerly  offered,  and  secured  solid  value 
in  exchange  for  the  semblance  of  it,  which  had  be 
come  so  prized  by  the  crowd  of  dupes.  The  first 
effect  of  this  desire  to  realize  was  a  general  increase 
in  the  price  of  everything.  An  enormous  mass  of 
paper  being  put  in  the  balance  with  the  existing 
quantity  of  merchandise  and  other  property,  the 
more  paper  there  was  offered  against  purchasable 
objects  the  more  rapid  the  increase  became.  Cloth, 
which  heretofore  brought  fifteen  to  eighteen  francs 

127 


128  MEMOIR    OF   JOHN    LAW. 

a  yard,  rose  to  one  hundred  and  twenty-five  francs  a 
yard.  In  a  cook-shop,  a  Mississippian,  bidding 
against  a  nobleman  for  a  fowl,  ran  the  price  up  to 
two  hundred  francs. 

From  this  instant  the  shares  suffered  their  first 
decline,  and  a  heavy  uneasiness  began  to  spread 
abroad.  The  extent  of  the  fall  was  not  measured 
by  those  whom  it  menaced ;  but  people  wondered, 
doubted,  and  began  to  be  alarmed.  The  shares 
declined  to  fifteen  thousand  francs.  However,  the 
bank  notes  were  not  yet  distrusted.  The  bank  was, 
in  fact,  entirely  distinct  from  the  company,  and 
their  fate,  up  to  this  time,  appeared  in  no  way 
dependent  the  one  on  the  other.  The  notes  had  not 
undergone  any  fictitious  and  extraordinary  advance. 
Large  amounts  had  been  issued,  certainly ;  but  for 
gold  and  silver,  and  upon  the  deposit  of  shares. 
The  portion  which  had  been  issued  upon  the  deposit 
of  shares  partook  of  the  danger  of  the  shares  them 
selves  ;  but  no  one  thought  of  that,  and  the  bank 
notes  still  possessed  the  entire  confidence  of  the 
public ;  only  they  no  longer  had  the  same  advan 
tage  over  specie  since  the  latter  had  been  so  much 
sought  by  the  "realizers."  The  notes  already 
began  to  be  presented  at  the  bank  for  coin,  and  the 
vast  reserve  which  it  had  possessed  began  to 
diminish  perceptibly. 


FORCING   A   CIRCULATION.  129 

Law  did  then  what  governments  do  so  often,  and 
always  with  ill  success :  he  resorted  to  forced  mea 
sures.  He  declared,  in  the  first  place,  by  decree, 
that  the  bank  notes  should  always  be  worth  five 
per  cent,  tnore  than  coin. 

In  consideration  of  this  superiority  in  value  the 
prohibition  which  forbade  the  deposits  of  gold  and 
silver  for  bills,  at  Paris,  was  taken  off,  so  that  notes 
could  be  procured  at  the  bank  for  coin.  This  per 
mission  was  simply  ridiculous,  for  no  one  now 
wished  to  exchange  specie  for  paper  even  at  par. 
But  this  was  not  all;  the  decree  declared,  that 
thereafter  silver  should  not  be  used  in  payments  of 
over  one  hundred  francs,  nor  gold  in  those  over 
three  hundred  francs.  This  was  forcing  the  circula 
tion  of  notes  in  large  payments,  and  that  of  specie 
in  small,  and  was  designed  to  accomplish  by  vio 
lence  what  could  only  be  expected  from  the  natural 
success  of  the  bank. 

These  measures  did  not  bring  any  more  gold  and 
silver  to  the  bank.  The  necessity  of  using  bank 
notes  in  payments  of  over  three  hundred  francs,  gave 
them  a  certain  forced  employment,  but  did  not  pro 
cure  them  confidence.  Notes  were  used  for  large 
payments,  but  coin  was  amassed  secretly  as  a  value 
more  real  and  more  assured.  The  creditors  of  the 

state  ceased  to  carry  their  receipts  to  the  rue  Quin- 

fi* 


130  MEMOIR   OF  JOHN   LAW. 

campoix,  because  they  already  distrusted  the  shares; 
they  could  not  deeide  to  buy  real  estate,  because 
the  price  had  been  quadrupled;  they  suffered  the 
most  painful  anxiety,  and,  in  their  turn,  embarrassed 
the  holders  of  shares  who  needed  the  receipts  to  pay 
their  installments  of  one-tenth.     The   catastrophe, 
approached,  and  nothing  could  avert  it,  unless  some 
magic  wand  could  give  the  company  an  income  of 
four  or  five  hundred  millions  a  year,  which  was  now 
only  seventy  or  eighty  millions. 

Law,  having  been  converted  by  the  Abbe*  de 
Tencin,  had  abjured  the  Protestant  religion,  and 
been  appointed  Comptroller-General  of  the  Finances. 
lie  was  anxious  to  revive  courage,  and,  during  the 
first  of  January,  1720,  he  made  his  appearance  in 
the  rue  Quincampoix,  in  the  full  costume  of  a 
minister,  surrounded  by  a  numerous  attendance  of 
noblemen.  His  presence  inspired  a  remnant  of 
enthusiasm,  and  revived  for  a  moment  all  the 
anticipations.  His  agents  spread  the  intelligence 
that  new  decrees  would  be  issued  in  favor  of  the 
company,  that  the  real  value  of  the  shares  would 
be  augmented,  and  that  they  must  rise  again 
immediately,  and  that  the  decline  was  the  result  of 
accident. 

In  fact,  Law  added  new  functions  to  those  which 
the  company  already  exercised.      He  caused  the 


NEW   PBOMISES.  131 

burdens  of  the  receivers  of  public  moneys  to  be  re 
funded;  lie  gave  it  the  receipts-general,  and  thus 
gave  it  the  entire  administration  of  the  public  reve 
nue.     He  reserved  for  it  the  profit  on  the  refine 
ment  of  gold  and  silver,  and  ordered  the  recoining 
of  certain  coins  in  order  to  obtain  the  opportunity 
for  making   a  new  profit.     He   caused  it  to   be 
announced  that   considerable   capital   was   to    be 
devoted  by  the  company  to  extend  the  fisheries, 
and  to  the   erection   of  new   manufactories.     He 
accorded  to  the  subscribers  a  more  extended  time 
of  payment  of  the  installments  of  one-tenth,  which 
reassured   many  who   were  embarrassed    by  the 
maturity   of   their    obligations.      He    caused    the 
directors  of  the  company  to  advertise  that  it  was 
about  to  declare  a  dividend  of  forty  per  cent,  upon 
its  nominal  capital  of  three  hundred  millions,  which 
would,  be  six  or  seven  per  cent,  upon  its  real  capital, 
and  which  would  suppose  an  income  of  one  hun 
dred  and  twenty  millions  a  year.     As  has  been 
shown,  this  promise  was  an  imposition,  for  the  in 
come  could  not  much  exceed  eighty  millions.     At 
last,  as  the  creditors  of  the  state  no  longer  sought 
a  liquidation  of  their  claims,  and  complained  that 
while  the  shares  fluctuated  the  price  of  real  estate 
had  quadrupled,  Law  issued  a  new  decree,  by  which 
all    those   who   did  not  present  their  claims    on 


132  MEMOIR  OF  JOHN   LAW. 

government  for  liquidation,  should  suffer  a  reduction 
on  them  of  two  per  cent. 

To  these  rigorous  measures  toward  the  creditors 
he  added  those  of  persuasion.  He  published  a 
pamphlet  entitled  "A  Letter  to  a  Creditor,"  in 
which  he  justified  his  refunding  project.  He  demon 
strated  that  the  system  of  perpetual  annuities  was 
ruinous  to  the  state,  and  that  the  abolition  of  them 
was  a  politic  measure.  He  reproached  the  annui 
tants  for  not  having  subscribed  in  season,  and  for 
not  having  taken  their  share  of  the  profits  of  the 
rise — a  fault,  if  it  was  one,  imputable  to  him  rather 
than  to  them,  since  he  was  the  author  of  the  pro 
ceedings  which  had  prevented  the  creditors  becom 
ing,  directly,  the  shareholders  in  the  company. 

These  measures  produced  a  transient  relief  in  the 
market.  The  shares,  which  had  declined  to  twelve 
thousand  francs,  rose  again  to  fifteen,  and  it  was 
thought  for  a  moment  that  they  had  yielded  only 
to  a  panic.  Besides,  every  decline  is  succeeded,  in 
the  passion  for  stock-jobbing,  by  a  reaction,  because 
the  decline  in  the  market  attracts  purchasers  who 
speculate  upon  a  return  of  the  rise.  The  creditors 
of  the  state  presented  their  claims  for  liquidation, 
but  they  hesitated,  notwithstanding  the  hopeful 
lights  which  were  displayed  so  brilliantly  before 
them,  to  invest  their  money  in  the  rue  Quincam- 


DECLINE  IN   NOTES   AND   SHARES.  133 

poix,  and  exchanged  their  receipts  for  bank  notes, 
which  obliged  the  bank  to  raise  the  issue  as  high  as 
a  billion.  In  this  manner,  the  amount  of  the  debt, 
which  should  have  been  converted  into  shares,  re 
mained  floating  in  the  shape  of  bank  notes. 

So  the  rise  was  only  momentary.  The  eagerness 
to  sell  remained  the  same;  the  decline  of  paper 
money  and  the  increased  price  of  .everything  con 
tinued  in  the  same  proportion.  The  shares  declined 
to  twelve  thousand. 

The  notes  also  began  sensibly  to  lose  their  value 
relative  to  specie.  Their  position  was,  as  we  have 
said,  different  from  that  of  the  shares.  They  repre 
sented  some  commercial  funds,  some  deposits  of 
gold  and  silver,  and  much  of  the  national  debt  re 
cently  refunded.  All  these  values  were  real. 
There  were  only  the  notes  representing  the  shares 
deposited,  which  constituted  values  suspected  and 
tainted  by  misrepresentation.  But,  although  this 
was  a  good  reason  for  discrediting  them,  the  real 
cause  of  their  decline  in  value  was  the  increasing 
disposition  to  realize.  Merchants  received  the 
notes,  but  it  was  to  take  them  to  the  bank.  These 
merchants  did  not  wish  to  realize  in  Paris  all  they 
could;  they  sent  quantities  of  bank  notes  away 
from  Paris  to  convert  them  into  specie,  still  suffi 
ciently  abundant  in  the  treasurie%of  the  provinces. 


134  MEMOES   OF  JOHN   LAW 

Law,  at  the  end  of  his  resources,  persevered  in 
the  employment  of  forced  measures.  In  order  to 
oppose  some  obstacle  to  the  eagerness  with  which 
people  exchanged  bank  notes  for  rich  ornaments, 
he  prohibited,  by  decree,  the  wearing  of  diamonds 
pearls  and  precious  stones.  To  stop  the  conversion 
of  notes  into'  specie,  which  the  merchants  effected 
in  the  provinces,  he  prohibited  the  transportation 
of  specie  between  cities  where  there  were  branches 
of  the  bank.  Heretofore  he  had  contented  himself 
with  enabling  creditors  to  require  payment  in  bank 
notes,  and  afterward  by  requiring  that  all  pay 
ments  of  more  than  three  hundred  francs  should  be 
made  in  notes,  but  specie  still  sufficed  for  ordinary 
purposes.  He  settled  this  difficulty  by  a  decree  of 
the  28th  of  January,  giving  a  forced  currency  to 
bank  notes.  Law,  at  last,  had  recourse  to  a  new 
alteration  of  the  coin  to  give  a  movement  to  specie 
and  bring  it  back  to  the  bank.  After  three  days, 
gold  was  to  be  reduced  from  nine  hundred  to  eight 
hundred  and  ten  francs  to  the  marc,  and  silver  from 
sixty  to  fifty-four.  The  confiscation  of  all  the  old 
coin  was  ordered,  the  recoinage  of  which  had  been 
directed,  and  which  had  not  been  brought  to  the 
mint.  Domiciliary  visits  were  authorized  to  dis 
cover  any  infringement  of  these  regulations. 

These  odious  measures  did   not  arrest  the  con- 


EXTRAVAGANCE   OF   THE    SUCCESSFUL.  135 

tinued  decline  of  the  shares,  nor  the  progressive, 
though  less  rapid,  discredit  of  the  bank  notes.  The 
shares  fell  to  ten  thousand  francs.  At  this  time  the 
scene  was  deplorable.  The  creditors  of  the  state, 
their  claims  paid,  their  hands  full  of  bank  notes, 
afraid  to  buy  shares,  unable  to  invest  in  real  estate, 
remained  in  trembling  expectation  of  the  catastro 
phe  which  menaced  all  paper  securities.  The  spe 
culators  who  had  arrived  late  (toward  the  end  of 
the  rise),  having  brought  to  the  rue  Quincampoix 
the  sum  total  of  their  property,  and  exchanged 
their  substance  for  a  phantom,  were  a  prey  to  des 
pair.  As  to  those  who  had  become  rich,  they 
rushed  into  those  violent  pleasures  and  excesses 
which  the  soul  of  a  gambler  craves ;  they  displayed 
in  their  newly-acquired  mansions,  that  barbarous, 
monstrous  luxury  which  signalized  the  age  of 
Roman  corruption;  furniture  of  gold  and  silver, 
dazzling  jewels,  precious  odors,  fountains  of  per 
fumed  water,  fruits  from  both  continents,  monstrous 
fish,  marvellous  automatons,  half-naked  courte 
sans — this  was  the  display  which  some  of  them 
made  at  their  entertainments.  Those  who,  more 
cautious,  avoided  this  licentiousness,  committed  a 
great  wrong  toward  France,  by  transferring  our 
specie  to  foreign  countries  to  insure  certain  and  un 
assailable  fortunes  there.  The  manners  of  the  peo- 


136  MEMOIK   OF  JOHN   LAW. 

pie  were  corrupted  by  these  events.  The  power, 
which  all  classes  had,  of  enriching  themselves  with 
out  that  labor  which  renders  man  worthy  of  wealth 
and  temperate  in  the  enjoyment  of  it,  excited 
among  the  people  an  immoderate  ambition — an 
unbridled  rage  for  luxury — and  raised  up  a  crowd 
of  vulgar  upstarts,  strangers  to  refined  pleasures, 
and  abandoned  to  gross  and  brutal  indulgence. 

In  such  a  situation  of  affairs,  it  was  necessary  to 
take  some  decided  course.  It  was  evident  that  the 
decline  of  the  shares  would  continue  without  inter 
mission  ;  that  soon,  a  terror  seizing  upon  all  minds, 
the  discredit  would  be  as  exaggerated  as  the  credit 
had  been,  and  that  the  shares  would  fall  tempor 
arily  below  what  they  were  actually  worth.  It  was 
necessary  to  be  resigned  to  this  and  to  submit  to  the 
consequences  of  the  fault  which  had  been  com 
mitted  in  the  conversion  of  the  public  debt.  It  was 
necessary  to  let  the  shares  fall,  the  inordinate  ad 
vance  of  which  could  not  be  prevented,  but  to 
hasten  to  save  the  bank,  an  institution  vast,  useful, 
and  become,  for  the  moment,  sacred.  The  notes,  in 
fact,  had  every  claim  to  protection  from  the  shares. 
The  speculators  in  the  shares  had  undoubtedly  been 
deceived ;  among  them  many  creditors  of  the  state 
had  been  the  victims  of  deplorable  illusions  ;  never 
theless  they  had  wished  to  speculate  and  had 


EFFORTS  TO  SAVE  THE  NOTES.         137 

freely  taken  the  chances  of  fortune.  The  holders  of 
bank  notes,  on  the  contrary,  were  forced  to  accept 
them  by  the  decrees  which  refunded  the  public 
debt,  which  obliged  the  payment  of  all  sums  over 
three  hundred  francs  in  notes,  which,  at  last,  gave 
a  forced  currency  to  them.  The  notes  were  a  value 
which  the  holders  had  taken  without  any  choice  of 
their  own,  without  seeking  the  chances  of  fortune, 
by  force,  in  obedience  to  the  law.  Unless  it  would 
subject  itself  to  the  charge  of  actual  theft,  the  law 
ought  to  guarantee  the  value  of  the  notes. 

In  a  word,  it  was  necessary  to  sacrifice  the  shares 
to  protect  the  notes.  The  means  of  accomplishing 
this  were  very  simple,  it  was  to  disconnect  the  fate 
of  the  notes  from  that  of  the  shares.  There  were 
a  billion  francs  in  bank  notes  in  circulation.  A 
part  of  this  sum  had  been  issued  to  discount  bills  of 
exchange,  another  part  to  pay  the  creditors  of  the 
state.  These  were  issued  upon  a  solid  foundation, 
since  they  represented  commercial  bills  which  were 
soon  due,  and  a  part  of  the  public  debt.  Four 
hundred  and  fifty  millions  had  been  issued  upon 
shares  deposited.  These  had  no  foundation.  These 
should  have  been  recalled  immediately,  by  calling 
in  the  loans,  and  thus  entirely  detaching  the  notes 
from  the  shares.  These  would  have  sunk  immedi 
ately.  It  was  necessary  to  become  callous,  to  sus- 


138  MEMOIR   OF    JOHN   LAW. 

tain  many  just  reproaches  and  defy  the  unjust,  and 
expiate  an  exaggerated  popularity,  by  suffering  an 
excessive  condemnation.  The  shares  would  then 
have  risen  again,  but  not  beyond  the  limit  where 
the  certain  income  of  the  company  would  have  car 
ried  them.  It  had  eighty  millions  that  year  to 
divide,  it  could  have  one  hundred  millions  the  next 
year.  This  would  give  a  dividend  of  five  per  cent., 
and  would  be  sufficient,  at  the  present  rates,  to 
maintain  the  total  capital  at  two  billions,  which 
would  give  a  market  price  of  about  three  thousand 
francs  a  share.  At  this  price,  the  shares  would 
again  have  crept  by  degrees  into  favor,  and  the 
creditors  of  the  state,  holders  of  large  sums  in  bank 
notes,  would  have  employed  them  sooner  or  later 
in  paying  the  installments.  The  company  would 
have  been  saved  with  the  bank,  and  the  system 
itself  would  have  survived  the  panic.  But  what 
courage  was  needed  to  brave  the  cries  of  those  of 
the  creditors  who  had  been  unwittingly  led  into 
this  fatal  course ;  of  that  nobility,  whose  wildest 
hopes  had  been  nourished ;  who,  in  possessing 
shares,  thought  their  hands  filled  with  gold — who 
surrounded  Law  with  homage — who  regarded  him 
as  a  benefactor,  and  called  him  the  great  Law ! 
How  dare  he  betray  their  hopes,  renounce  theii 
adorations,  and  endure  their  contempt  and  fury  ? 


CONCEALMENT  OF   COIN".  139 

Law  conceived  a  plan,  at  once  violent  and 
criminal,  which,  had  the  faults  which  all  those  have 
which  oppose  a  necessity,  and  which  risk  every 
thing  rather  than  sacrifice  anything.  He  resolved 
to  sustain  the  bank  notes  by  forced  measures,  and 
to  join  the  fate  of  the  shares  to  that  of  the  notes  at  the 
risk  of  ruining  both.  Here  is  his  plan  in  detail. 

We  have  already  seen  what  he  had  done  to  com 
pel  the  employment  of  notes,  and  thus  sustain  their 
credit.  They  had  been  given  the  currency  of  coin ; 
they  alone  could  be  employed  in  payments  over 
three  hundred  francs,  and  in  the  transfer  of  funds 
from  province  to  province.  To  these  regulations 
Law  added  some  still  more  violent.  By  the  decrees 
of  the  23d  and  25th  of  February,  the  notes  alone 
could  be  employed  in  payments  of  over  one  hundred 
francs.  Notwithstanding  this  extension  of  the 
exclusive  use  of  notes,  the  concealment  of  coin  con 
tinued.  Law  forbade  the  holding  of  more  than  five 
hundred  francs  in  specie  at  a  time,  by  any  indi 
vidual,  under  a  penalty  of  10,000  francs.  Inform 
ers  were  allowed  half  the  fine,  which  immediately 
introduced  distrust  and  trouble  in  families.  The 
prevention  of  the  hoarding  of  coin  did  not  interdict 
all  outlets  for  it  except  the  boxes  in  the  treasury. 
There  remained  its  conversion  into  furniture  and 
plate.  Law  limited  this  fabrication  by  a  series  of 


140  MEMOIR   OF  JOHN   LAW. 

articles  which  must  be  read  to  enable  one  to  con 
ceive  the  embarrassments  which  involve  the  adoption 
of  forced  measures.  JSTo  work  in  gold  was  allowed 
to  weigh  more  than  an  ounce.  The  manufacture 
of  silver  plate  was  still  permitted,  but  the  largest 
dishes  could  not  weigh  more  than  ten  marcs,  a  dozen 
plates  more  than  thirty  marcs,  a  sugar  bowl  more 
than  three  marcs,  candlesticks  more  than  four,  etc. 

Many  articles  of  furniture  and  luxury  were 
enumerated,  the  manufacture  of  which  in  gold  or 
silver  was  prohibited.  After  having  prevented  the 
hoarding  or  casting  of  precious  metals,  in  order  to 
oblige  them  to  be  brought  to  the  bank,  Law  resorted 
to  a  proceeding  still  more  censurable :  that  of 
another  alteration  in  the  value  of  coin.  By  the 
same  decrees  he  raised  the  marc  of  silver  from 
sixty  to  eighty  francs,  with  the  purpose  of  reducing 
it  soon  to  sixty  again.  At  the  moment  of  the  re 
duction  the  possessors  of  coin  must  necessarily  bring 
it  to  the  bank,  to  avoid  its  decline  in  their  hands ; 
but  in  this  case  it  was  the  bank  which  sustained  the 
loss  by  the  reduction,  and  it  attracted  coin  only  by 
sustaining  considerable  losses,  and  by  disturbing, 
besides,  all  kinds  of  transactions  by  this  fluctuation 
in  values.  The  marc  being  raised  from  sixty  to 
eighty  francs,  the  coin  in  France  was  increased  from 
twelve  to  sixteen  millions. 


NOTES  TO  CHAPTER  YL 


(1.)  A  LAST  effort  was  therefore  tried  to  restore 
the  public  confidence  in  the  Mississippi  project. 
For  this  purpose,  a  general  conscription  of  all  the 
poor  wretches  in  Paris  was  made  by  order  of  gov 
ernment.  Upward  of  six  thousand  of  the  very 
refuse  of  the  population  were  impressed,  as  if  in 
time  of  war,  and  were  provided  with  clothes  and 
tools  to  be  embarked  for  ISTew  Orleans,  to  work  in 
the  gold  mines  alleged  to  abound  there.  They 
were  paraded  day  after  day  through  the  streets  with 
their  pikes  and  shovels,  and  then  sent  off  in  small 
detachments  to  the  outposts  to  be  shipped  for 
America.  Two-thirds  of  them  never  reached  their 
destination,  but  dispersed  themselves  over  the  coun. 
try,  sold  their  tools  for  what  they  could  get,  and 
returned  to  their  old  course  of  life.  In  less  than 
three  weeks  afterwards,  one-half  of  them  were  to 
be  found  again  in  Paris.  The  manoeuvre,  however, 
caused  a  triniiig  advance  in  Mississippi  stock. 
Many  persons  of  superabundant  gullibility  believed 
that  operations  had  begun  in  earnest  in  the  new 

141 


14:2  MEMOIR   OF   JOHN   LAW. 

Golconda,  and  that  gold  and  silver  ingots  would 
again  be  found  in  France. — MACKAY'S  Popula/r 
Delusions. 

(2.)  The  vagabonds  and  refuse  of  justice  having 
produced  nothing  but  disorder  in  Mississippi,  the 
company  changed  its  method  of  recruiting,  and^ 
instead  of  criminals,  those  alone  whose  only  crimw 
was  poverty  were  condemned  to  this  exile.— 
COCHUT. 


CHAPTER  VII. 

The  bank  and  the  company  united — Price  of  the  shares  fixed — 
Measures  for  regulating  the  exchange  of  shares — Frightful  de 
preciation  of  bank  notes — Debtors  the  only  persons  benefited — 
Father  betrayed  by  his  son — Speculators  dispersed  by  soldiers — 
Second  "  Letter  to  a  Creditor" — Ingratitude  of  the  Mississippians 
— Murder  and  robbery  by  a  young  nobleman — Firmness  of  the 
Regent. 


143 


CHAPTER   VII. 

THE  bank  and  the  company  were  at  last  united, 
which  was  the  essential  condition  of  the  general 
plan  of  Law,  but  which  should  not  have  been 
effected  until  the  company  should  have  escaped 
from  its  troubles  by  the  reduction  of  its  shares  to  a 
price  proportioned  to  its  actual  income.  Law 
issued  this  decree  on  the  5th  of  March,  which 
achieved  the  grand  object  of  his  desires.  This 
decree  fixed  the  price  of  the  shares,  for  the  future, 
at  nine  thousand  francs.  It  effected  nothing  to  fix 
the  price  in  this  arbitrary  manner ;  the  price  must 
be  assured  to  those  who  wished  to  sell.  The  same 
decree  also  ordered  the  opening  of  an  office  at  the 
bank  for  exchanging  shares  for  notes,  or  notes  for 
shares,  at  pleasure,  at  the  price  of  nine  thousand 
francs  a  share.  By  this  measure  Law  thought,  or 
pretended  to  think,  that  he  had  definitely  fixed  the 
condition  of  the  shares.  The  value  of  notes  being 
assured,  according  to  him,  by  the  different  decrees 
he  had  issued,  that  of  the  shares  was  assured  by  the 
optional  conversion  of  them  into  notes.  The  sys- 

7  145 


146  MEMOIR   OF  JOHN   LAW. 

tern  thus  tended  toward  the  accomplishment  of 
one  of  its  perfections,  which  was  to  offer  to  the 
public,  at  their  option,  either  a  profitable  invest 
ment  or  a  sound  currency.  This  combination 
offered  a  profit  calculated  with  great  ingenuity. 
Every  share  exchanged  for  notes  and  deposited  in 
the  bank  ceased  to  pay  a  profit  to  the  depositor, 
and,  of  course,  was  a  profit  to  the  company,  which 
received  the  income  on  it.  In  this  manner,  the 
dividend  earned  on  the  deposited  shares  increased 
that  on  the  shares  which  were  held  as  an  invest 
ment,  not  having  been  exchanged  for  notes. 

This  project  of  a  great  intellect  at  bay,  contend 
ing  against  an  inevitable  catastrophe,  has  been 
attributed  to  the  ministers  of  the  quadruple  alli 
ance  by  the  friends  of  Law,  who  have  sought  to 
excuse  his  faults.  These  ministers,  say  the  apolo 
gists  of  Law,  desired  to  ruin  the  system,  and  con 
trived  the  decree  of  the  5th  of  March.  The  apolo 
gists  are  mistaken.  The  decree  belonged  positively 
to  Law ;  everything  proves  it — the  subtlety  of  the 
combination,  the  care  taken  to  adapt  it  to  the 
original  plan,  and  the  manifest  desire  to  sustain  the 
shares,  even  at  the  expense  of  the  notes. 

This  disastrous  project  contained  the  greatest 
errors  at  once  of  principle  and  of  their  application. 
In  the  first  place,  the  value  of  the  notes  was  far  from 


ATTEMPT   TO   FIX   THE   PRICE   OF    SHAKES.         147 

being  consolidated  by  the  forced  measures  which 
had  been  resorted  to ;  and  had  it  been,  it  would 
have  been  destroyed  by  the  attempt  to  attach  to  it 
the  value  of  the  shares.  Then  it  was  a  grave  error 
to  attempt  to  fix  the  price  of  the  shares,  even  if  the 
value  had  been  real  and  not  exaggerated.  The 
shares,  representing  the  capital  invested  in  an  enter 
prise  which  could  have  greater  or  less  success,  or 
even  no  success  at  all,  ought  to  be  uncertain,  like 
the  result,  and  lose  or  gain  according  to  the  chances 
of  success.  It  should  be  thus  with  all  investments. 
The  desire  to  render  them  more  easily  disposed  of 
by  facilitating  the  exchange  of  the  scrip  was  com 
mendable,  but  the  liberation  of  invested  capital,  so 
as  to  render  it  convertible  at  any  moment  into  a 
fixed  sum  of  money,  was  to  convert  it  directly  into 
nothing  less  than  money  itself;  and  then  interest 
upon  it  was  "  nonsense,"  for  interest  is  designed  to 
pay  for  what  is  not  in  circulation.  It  was  absurd 
to  wish  to  fix  the  price  of  the  shares ;  moreover,  in 
the  existing  circumstances,  it  was  criminal.  A 
large  number  of  shares  were  exchanged  for  bank 
notes,  and  the  notes  becoming  confounded  with  the 
imaginary  capital  of  the  rue  Quincampoix,  must  sink 
with  it.  At  the  existing  prices,  the  total  number  of 
shares  was  still  worth  five  or  six  billions,  and  must 
fall  inevitably  to  two  billions  or  fifteen  hundred 


148  MEMOIR   OF  JOHN   LAW. 

millions.  The  bank-notes  must  share  this  bank 
ruptcy,  and  the  involuntary  holder  of  the  notes 
must  share  the  ruin  of  the  Mississippia/ns.  With 
out  having  wished  to  speculate,  without  having 
taken  any  of  the  chances,  he  was  despoiled,  he  was 
ruined  by  the  law. 

Some  other  provisions,  the  necessary  consequence 
of  the  preceding,  were  contained  in  the  famous 
decree  of  the  fifth  of  March,  1720.  All  the  sums 
lent  upon  deposits  of  shares  were  to  be  called  in, 
since  by  the  optional  conversion  a  new  mode  of 
deposit  had  been  instituted.  The  loans  amounted 
to  four  hundred  and  twenty-five  millions.  Many 
of  the  subscribers  not  having  completed  their  pay 
ments,  because  they  had  not  the  means,  or  because 
Vhe  creditors  no  longer  brought  their  receipts  to  the 
rue  Quincampoix,  Law  obviated  the  difficulty  by 
uniting  several  shares,  the  first  payments  on  which 
had  been  made,  to  make  one  share  entirely  paid  in. 
Four  of  the  ten  payments  on  the  great  subscription 
of  fifteen  hundred  shares  had  been  made ;  that  is,  two 
thousand  francs  of  the  five  due  on  each.  For  these 
two  thousand  francs  and  the  three  still  unpaid, 
the  subscriber  was  entitled  to  one  share,  the  price 
of  which  was  then  nine  thousand.  He  paid  five 
thousand  for  what  was  worth  nine  thousand;  he 
thus  gained  four  thousand ;  upon  three  shares  he 


REDUCTION    OF    SHAKES.  149 

gained  twelve  thousand  francs.  In  this  manner 
there  was  a  profit  in  reducing  several  shares  to  one. 
Three  subscriptions,  upon  which  four  payments  had 
been  made,  paid  for  two  shares.  These  three  sub 
scriptions,  with  four  payments  on  each,  made  six 
thousand  francs  paid  in.  The  subscriber  then  had, 
for  six  thousand  francs,  two  shares  at  nine  thousand 
francs  each,  or  together,  eighteen  thousand  francs. 
He  gained  twelve  thousand  francs,  all  as  if  there 
had  been  no  confusion. 

The  company,  having  been  paid  four  of  the  ten 
installments,  had  received  six  hundred  millions,  and 
was  to  receive  nine  hundred  more  to  complete  the 
amount  of  fifteen  hundred  millions.  By  reducing 
the  three  hundred  shares  one-third,  which  it  was 
the  original  intention  to  issue,  to  obtain  the  fifteen 
hundred  millions,  it  left  two  hundred  thousand  in 
the  market,  and  reserved  one  hundred  thousand, 
which,  at  nine  thousand  francs,  represented  the  nine 
hundred  millions  remaining  to  be  collected.  By 
this  arrangement  all  the  shares  issued  were  wholly 
paid  for ;  the  remainder  were  simply  new  shares  to 
be  sold.  The  result  of  this  regulation  of  the  ac 
count  with  the  shareholders,  was,  that  a  part  of  the 
shares  were  retained  by  the  company,  which,  accord 
ing  to  the  first  terms  of  subscription,  the  subscribers 
would  have  been  obliged  to  take.  These  terms, 


150  MEMOIR   OF  JOHN   LAW. 

moreover,  had  become  illnsory  since  the  establish 
ment  of  the  office  for  purchase  and  sale,  as  ever  j  one 
was  at  liberty  to  return  his  shares  to  the  company. 
Besides  the  one  hundred  thousand  shares  which 
the  company  consented  to  retain,  and  which  repre 
sented  the  unpaid  installments,  it  took  charge  of 
another  one   hundred  thousand  belonging  to   the 
royal  treasury,  which  had  become  a  subscriber  by 
benevolently  taking  on  its  own  account  the  shares 
of  a  number  of  noble  families,  favorites    of  the 
regent.     The  company  agreed  to  pay  nine  hundred 
millions  for  them,  but  it  was  to  have  three  years  in 
which  to  pay  it.    This  precaution  was  indispensable, 
as  otherwise  it  would  have  been  compelled  to  issue 
nine  hundred  millions  more  of  bank  notes,  and  the 
already  overburdened  circulation  could  not  possibly 
have  sustained  it. 

As  the  creditors,  forced  to  accept  payment,  would 
not  take  the  shares  in  which  they  no  longer  had 
any  confidence,  and  could  not  buy  real  estate  be 
cause  of  the  excessive  exaltation  in  its  price,  the 
company  was  permitted  to  return  to  its  system  of 
pensions,  and  to  create  ten  millions  of  them  at  two 
and  a  half  per  cent.  This  offered  an  investment 
for  those  who  did  not  know  how  to  make  use  of 
their  bank-notes,  and  a  method  for  calling  in  four 
hundred  millions  of  notes. 


DEPRECIATION   OF  BANK-NOTES.  151 

These  were  the  measures  devised  by  Law  to 
retard  the  catastrophe  which  could  not  be  averted. 
The  office  for  the  purchase  and  the  sale  of  shares 
was  scarcely  opened  when  the  crowd  poured  into 
it.  Four  hundred  and  twenty-five  millions  of  the 
billion  of  notes  issued  had  been  recalled  by  the  re 
vocation  of  the  loans  on  deposits  of  shares. 
These  had  been  immediately  re-issued  to  pay  for  the 
shares  presented  for  exchange.  The  bank  was  even 
compelled  to  issue  another  billion  to  satisfy  all  the 
demands,  which  raised  the  total  issue  to  two  billions. 

From  this  moment  the  depreciation  of  bank-notes, 
and  the  appreciation  of  everything  else,  was  more 
rapid  than  ever.  Heretofore  the  shares  being  con 
vertible  into  notes  only  by  sale  in  the  market,  the 
conversion  had  been  little  by  little,  and  their  value 
had  been  exchanged  slowly  for  merchandise,  real 
estate  and  all  kinds  of  purchasable  property.  But 
the  power  of  immediate  conversion  being  given, 
the  whole  mass  of  shares  could  be  realized  at  once. 
There  were  fifteen  or  sixteen  hundred  millions 
realized,  as  we  have  just  seen.  Thus  the  deprecia 
tion  made  frightful  progress.  It  was  no  longer  the 
shares  which  declined,  since  they  could  always  be 
converted  at  will  for  a  fixed  sum  of  bank-notes, 
but  the  notes  themselves  depreciated.  In  February 
the  notes  were  at  a  discount  of  only  ten  per  cent., 


152  MEMOIR  OF  JOHN   LAW. 

while  the  shares  had  fallen  one-half.  After  the 
decree  of  the  5th  of  March  the  shares  no  longer 
declined,  but  the  notes  were  at  forty  or  fifty  per 
cent,  discount.  The  shares  were  still  quoted  at 
nine  thousand  francs :  but  nine  thousand  francs  in 
notes  were  worth  only  four  or  five  thousand  in  coin. 
Violent  and  vexatious  as  the  measures  were  to  sus 
tain  the  credit  of  the  notes,  they  were  insufficient 
to  give  them  a  value  which  they  did  not  possess. 
No  one  wished  to  make  use  of  them ;  dishonest 
debtors  alone  used  them  to  pay  their  debts.  Les 
sees  paid  their  rent  in  notes,  which  operation 
relieved  many  of  them  who  were  much  involved. 
The  nobility,  especially,  paid  all  their  debts  in  this 
way,  and  thus  relieved  their  estates  from  the  mor- 
tages  with  which  they  were  encumbered.  Law 
thus  accomplished  a  part  of  what  he  had  promised 
them  by  furnishing  them  with  a  means  of  freeing 
themselves  from  debt.  But  if  the  notes  were  good 
for  defrauding  old  creditors,  they  were  only  worth 
one-half  their  nominal  value  for  new  purchases. 
Coin  was  secretly  used  for  daily  purchases,  and  was 
concealed  with  care,  to  avoid  the  necessity  of  taking 
it  to  the  bank.  Notwithstanding  the  prohibition  to 
retain  more  than  five  hundred  francs  in  coin,  and  the 
inducements  offered  to  informers,  many  accumulated 
it  clandestinely.  It  is  true  that  their  resistance  of  the 


EXPOKTATI01I   OF  SPECIE.  153 

law  gave  them  many  pangs.  They  feared  every 
moment  a  betrayal  by  their  servants,  and  even  by 
their  nearest  relatives.  People  saw  with  indigna- 
nation  an  unnatural  son  betray  his  father.  The 
Eegent  rendered  a  judgment  full  of  wisdom  against 
the  son,  and  everybody  applauded  him  for  it.  But 
the  system  fell  into  greater  contempt  than  ever. 
A  frightened  few,  however,  returned  their  coin  to 
the  bank,  but  the  number  was  small ;  the  greater 
part  buried  it  in  the  earth,  and  the  rich  reaUzers 
used  every  artifice  to  transfer  it  to  foreign  coun 
tries.  Another  portion  of  our  coin  left  France,  and 
although  the  exportation  of  specie  is  not  necessarily 
injurious,  it  was  so  at  this  time,  since  it  left  behind 
only  a  false  paper  currency  and  an  imaginary  capi 
tal. 

The  rue  Quincarnpoix  was  still  frequented,  but 
no  longer  for  speculation  in  shares,  but  for  the  ex 
change  of  notes  for  every  kind  of  movable  and 
immovable  property.  Law  prohibited  the  assemb 
ling  of  crowds  in  this  street,  because  the  price  of 
shares  being  fixed,  they  could  no  longer  be  the  sub 
ject  of  bargains.  The  crowd  persisted,  none  the 
less,  in  assembling.  Then  the  archers  were  sent  to 
disperse  the  speculators,  and  these  new  rigors  in 
creased  still  more  the  hatred  which  the  system  and 
its  author  inspired. 

7* 


154  MEMOES    OF   JOHN    LAW. 


Under  these  circumstances  Law  published  a 
second  "Letter  to  a  Creditor  of  the  State"  upon 
the  whole  of  his  operations.  It  was  dated  the  llth 
of  March,  1720.  He  was  right  in  the  principles 
which  he  maintained,  but  he  only  employed  miser 
able  sophisms  to  justify  the  exaggerated  price  to 
which  he  had  permitted  the  shares  to  rise,  and  at 
which  he  had  wished  to  maintain  them.  All  value, 
he  argued,  was  matter  of  opinion.  Only  one  thing 
is  necessary  to  sustain  it,  i.  e.  "  do  not  seek  to  sell." 
Houses  and  lands  have,  indeed,  a  real  value ;  never 
theless,  if  everybody  wished  to  sell  them  at  the 
same  time,  what  would  become  of  it  ?  It  was  easy 
to  answer  this  wretched  sophism.  Lands  and 
houses  produce  something  which  establishes  the 
income  which  they  yield,  and  is  a  solid  foundation 
of  value.  On  the  other  hand,  it  was  impossible  to 
establish  the  supposititious  income  of  the  shares,  be 
cause  the  business  profits  could  not  in  any  case  be 
proportionate  to  the  extravagant  price  of  the  capital. 
Notwithstanding  the  certainty  of  their  income,  if 
lands  or  houses  were  doubled  or  tripled  in  extent  or 
number  they  would  immediately  depreciate  in  pro 
portion.  Even  if  the  shares  had  received  such  an 
income,  as  unfortunately  they  did  not,  the  im 
mediate  creation  of  such  an  enormous  investment 
would  have  caused  a  depreciation.  Were  there  in 


INGRATITUDE   OF  THE   MISSISSIPPIAJBTS.  155 

all  France  five  or  six  billions  of  francs  to  invest  in 
shares  bearing  interest  ?  Nothing  was  more  false 
than  Law's  reasoning.  He  added  to  it  severe  ex 
pressions — deserved,  but  useless — against  the  real- 
izers  who  precipitated  the  fall  of  the  system  by 
selling  their  shares. 

His  letter  did  not  allay  the  irritation.  He  was 
called  a  miserable  sophist,  and  the  rich  Mississi/p- 
pians,  whom  he  accused  of  ruining  the  system  by 
• realizing,  inveighed  against  him  with  a  violence 
which  was,  in  them,  black  ingratitude.  Some  of 
them  exhibited  their  contempt  for  paper  money  by 
lighting  with  bank-notes  the  chafing  dishes  which 
covered  their  luxurious  tables.  A  frightful  incident 
augmented  still  more  the  general  apprehension.  In 
the  midst  of  this  delirious  cupidity  which  had 
seized  upon  all  minds,  some  profligate  young  noble 
men,  who  had  been  unsuccessful  in  speculation, 
resolved  to  steal  that  which  they  had  not  the  wit  to 
win.  They  formed  a  plot,  it  was  said,  to  seize  the 
portfolios  of  the  speculators,  charging  upon  them 
sword  in  hand  as  they  were  assembled  in  the  rue 
Quincampoix.  A  crime  committed  before  the  exe 
cution  of  the  plot  fortunately  rendered  it  impossible. 
A  young  roue",  the  Count  de  Horn,  united  with  two 
companions  of  his  debaucheries,  and  with  their  aid 
seized  the  person  of  a  rich  speculator.  They  carried 


156 


MEMOIR  OF  JOHJST  LAW. 


Mm  to  a  tavern,  where  they  murdered  and  then 
plundered  him.  They  succeeded  at  first  in  making 
their  escape,  but,  pursued  by  the  clamors  of  the 
people,  they  were  arrested  and  confessed  their 
crime.  The  whole  of  the  nobility  surrounded  the 
Eegent,  imploring  him  to  spare  the  young  Count  de 
Horn  an  infamous  punishment.  The  Regent  re 
sisted  nobly,  and  answered  all  that  was  said  on 
behalf  of  the  family  with :  "  The  crime  makes  the 
infamy,  not  the  scaffold."  Law  insisted  that  the 
example  was  indispensable  at  that  time,  when 
everybody  had  their  whole  fortune  in  their  port 
folios.  The  Count  de  Horn  expired  upon  the 
wheel. 


NOTES  TO  CHAPTEE  VH. 


(1.)  FROM  the  conclusion  of  this  letter  we  learn 
that  the  cares  of  his  station,  the  pressure  of  business, 
or  the  adulation  so  lavishly  bestowed  on  him,  or  per 
haps  all  these  causes  combined,  had  begun  to  affect 
the  minister's  brain.  "  Law's  head  is  so  heated  that 
he  does  not  sleep  at  night,  and  has  terrible  fits  of 
frenzy.  He  gets  out  of  bed  almost  every  night, 
and  runs  stark  staring  mad  about  the  room,  making 
a  terrible  noise,  sometimes  singing  and  dancing,  at 
other  times  swearing,  staring  and  stamping,  quite 
out  of  himself.  Some  nights  ago,  his  wife,  who  had 
come  into  the  room  upon  the  noise  he  made, 
was  forced  to  ring  the  bell  for  people  to  come  to 
her  assistance.  The  officer  of  Law's  guard  was  the 
first  that  came,  and  found  Law  in  his  shirt,  who 
had  set  two  chairs  in  the  middle  of  the  room,  and 
was  dancing  round  them,  quite  out  of  his  wits. 
This  scene  the  officer  of  the  guard  told  Le  Blanc, 

157 


158  MEMOIR   OF   JOHN   LAW. 

from  whom  it  came  to  me  by  a  very  sure  convey 
ance." — HARDWICKE  :  State  Papers. 

(2.)  "  Since  Law  is  comptroller  general  his  head 
is  turned,"  said  the  regent.  In  fact  from  the  very 
day  when  the  author  of  the  system  was  discon 
certed  by  the  manoeuvre  of  the  realizers,  it  is  very 
difficult  to  follow  his  operations — they  are  like  the 
nervous  incoherent  movements  of  a  drowning  man 
— COCHUT. 


CHAPTER  VIII. 

Circulation  of  gold  prohibited— Reduction  of  the  nominal  value  of 
shares  and  bank  notes — Great  clamor  raised — Whole  blame  of 
the  reduction  falls  on  Law — Regent  yields  to  the  clamor — He 
retains  Law  in  his  favor — Law  repeals  some  of  the  most  obnox 
ious  regulations — Measures  to  abolish  the  System — Difficulties  in 
carrying  them  out. 


159 


CHAPTER 


LAW,  adding  measures  to  measures,  at  last 
prohibited  the  circulation  of  gold,  because  this 
metal  was,  by  its  convenience,  a  rival  of  bank-notes 
infinitely  more  dangerous  than  silver.  He  then 
announced  an  approaching  reduction  in  the  value 
of  coin,  which  he  had  raised  by  a  decree  in  Febru 
ary,  only  to  reduce  it  again  in  a  short  time.  The 
marc  in  silver,  raised  from  sixty  to  eighty  francs, 
was  reduced  to  seventy  on  the  1st  of  April,  and 
sixty-five  on  the  1st  of  May.  But  this  measure  was 
utterly  insufficient  to  bring  it  to  the  bank. 

The  situation  grew  worse  every  day  ;  the  issue  of 
notes  to  pay  for  the  shares  presented  at  the  bank 
had  risen  to  two  billions,  six  hundred  and  ninety- 
six  millions  ;  their  depreciation  increased,  and  cre 
ditors  of  every  description  being  paid  in  paper 
which  was  at  a  discount  of  sixty  per  cent.,  com 
plained  bitterly  of  the  theft  authorized  by  law. 

In  this  juncture  there  remained  but  one  step  to 
be  taken.  As  the  necessary  sacrifice  had  not  been 

161 


162  MEMO1K   OF   JOHN   LAW. 

made  in  the  first  place,  and  the  shares  abandoned 
to  their  fate  in  order  to  protect  the  notes,  both 
must  now  be  sacrificed,  shares  and  notes  together, 
in  order  to  finish  this  wicked  fiction.  The  false 
hood  of  this  nominal  value,  which  obliged  men  to 
receive  at  par  what  was  depreciated  thirty  or  forty 
per  cent,  could  not  be  prolonged.  The  immediate 
reduction  of  the  nominal  value  of  the  shares  and 
bank-notes  was  the  only  resource.  Sacrifices  can 
not  be  too  hastily  made  when  they  are  inevitable. 

M.  d'Argenson,  although  dismissed  from  the  trea 
sury,  still  remained  keeper  of  the  seals ;  he  had 
risen  in  the  esteem  of  the  regent,  as  Law  had 
declined,  and  he  advised  the  reduction  of  the  nomi 
nal  value  of  the  shares  and  notes  as  an  urgent 
necessity.  Law,  who  saw  in  this  reduction  an 
avowal  of  the  fiction  in  the  legal  values,  and  a  blow 
which  must  hasten  the  fall  of  the  system,  opposed  it 
with  his  whole  strength.  Nevertheless,  M. 
d'Argenson  prevailed.  On  the  21st  of  May,  1720, 
a  decree,  which  remains  famous  in  the  history  of 
the  system,  advertized  the  progressive  reduction  in 
the  value  of  shares  and  notes.  This  reduction  was 
to  begin  on  the  very  day  of  the  publication  of  the 
decree,  and  to  continue  from  month  to  month  until 
the  1st  of  December.  At  this  last  term  the  shares 
were  to  be  estimated  at  five  thousand  francs,  and  a 


EFFECTS    OF   THE   DECREE.  163 

bank-note  of  ten  thousand  francs  at  five  thousand — 
one  of  a  thousand  at  five  hundred,  etc.  The 
notes  were  thus  reduced  fifty  per  cent.,  and 
the  shares  only  four-ninths  per  cent.  Law, 
although  opposed  to  the  decree,  consented  to  pro 
mulgate  it. — (NOTE  1.) 

Scarcely  was  it  published  when  a  fearful  clamor 
was  raised  on  all  sides.  The  reduction  was  called  a 
bankruptcy ;  the  government  was  reproached  with 
being  the  first  to  throw  discredit  upon  the  values 
which  it  had  created,  with  having  robbed  its  own 
creditors,  a  number  of  whom  had  just  been  paid  in 
bank-notes,  even  as  late  as  the  preceding  day ;  in  a 
word,  with  assailing  the  fortunes  of  all  the  citizens. 
The  crowd  wished  to  sack  Law's  hotel,  and  to  tear 
him  in  pieces.  Nothing  that  could  have  happened 
would  have  produced  a  greater  clamor  ;  but  in 
times  like  those  it  was  not  only  necessary  not  to 
fear  these  clamors — it  was  even  a  duty  to  defy 
them.— (NOTES  2,  3.) 

The  reply  to  the  complaints  would  have  soon 
been  evident  to  the  intelligence  of  everybody. 
Without  doubt  the  creditors  of  the  state,  and  some 
private  individuals,  who  had  been  paid  in  bank 
notes,  were  half  ruined  by  the  reduction,  but  this 
was  not  the  fault  of  the  decree  of  the  21st  of  May — 
the  real  reduction  was  long  before  this ;  the  decree 


164  MEMOIR   OF   JOHN    LAW. 

only  stated  a  loss  already  experienced  and  the 
notes  were  worth  still  less  than  the  decree  declared. 
Because  a  number  of  creditors  had  been  ruined  by 
the  falsity  of  nominal  values,  was  it  a  reason  to 
continue  the  fiction  that  it  might  extend  the  ruin  ? 
On  the  contrary,  it  was  necessary  to  put  an  end  to 
it,  to  save  others  from  becoming  victims.  The 
official  declaration  of  the  fact,  although  it  was 
known  before,  must  produce  a  shock  and  hasten  th<? 
discredit,  but  it  was  of  little  importance  that  it  was 
hastened,  since  it  was  inevitable. 

The  public  thought  Law  the  author  of  this  mea 
sure,  advised  exclusively  by  M.  d'Argenson,  and 
he  became  the  sole  object  of  hatred.  The  parlia 
ment,  making  common  cause  with  the  public, 
thought  it  a  good  opportunity  to  take  up  arms.  It 
did  not  perceive,  in  its  blind  hatred  of  the  system, 
that  it  was  going  to  render  a  service  to  its  author, 
and  that  to  declare  itself  against  the  reduction  of 
the  bank-notes  was  to  maintain  that  the  values 
created  by  Law  had  a  solid  foundation.  It  assem 
bled  on  the  27th  of  May  to  demand  a  revocation  of 
the  decree  of  the  21st.  At  the  very  moment  when 
it  was  deliberating,  the  regent  sent  one  of  his  offi 
cers  to  prohibit  all  discussion,  announcing  the 
revocation  of  the  decree. 

The  regent  had  the  weakness  to  yield  to  the  pub- 


REVOCATION  OF  THE  DECREE.          165 

lie  clamor.  Had  the  decree  been  bad,  its  revocation 
would  have  been  worse.  To  declare  that  the  shares 
and  notes  were  still  worth  what  they  purported  to 
be,  availed  nothing;  for  no  one  believed  it,  and 
their  credit  was  not  restored  b j  it.  A  legal  falsehood 
was  reaffirmed,  and,  without  rendering  any  service 
to  those  who  were  already  ruined,  the  ruin  of  those 
who  were  obliged  to  receive  the  notes  at  their 
nominal  value  was  insured.  The  decree  of  the 
21st  of  May,  wise  if  it  had  been  sustained,  became 
disastrous  as  soon  as  it  was  revoked.  Its  only  effect 
was  to  hasten  the  general  discredit,  without  the 
essential  advantage  of  reestablishing  a  real,  legal 
value. 

The  regent  feigned,  in  public,  to  attribute  all  the 
evils  of  the  situation  to  Law,  and  to  remove  him 
from  the  general  control ;  but  he  received  him  in 
private,  and  offered  him  secret  consolation  for  his 
seeming  severity.  The  first  irritation  of  the  holders 
being  past,  he  welcomed  him  publicly  again ;  he 
even  received  him  in  his  box  at  the  opera,  and  gave 
him  a  guard  to  protect  his  house  from  the  attacks 
of  the  mob.  The  Cardinal  Dubois  was  indebted  to 
the  system  for  considerable  benefits,  and  he  united 
with  Law  in  an  effort  to  ruin  M.  d'Argenson,  the 
author  of  the  decree  of  the  21st  of  May.  The 
regent,  who,  notwithstanding  his  superiority  of  in- 


166  MEMOIR   OF   JOHN   LAW. 

tellect  and  his  military  courage,  lacked  resolution, 
suffered  himself  to  be  persuaded,  took  the  seals 
from  M.  d'Argenson,  and  gave  them  to  M. 
d'Aguesseau. 

Law  and  the  Chevalier  de  Conflans  hastened  to 
Frene  in  search  of  M.  d'Aguesseau,  who  had  the 
weakness  to  suffer  himself  to  be  brought  back  by 
the  author  of  his  first  disgrace.  Having  returned 
to  Paris,  he  suffered  in  the  public  estimation,  and 
the  affairs  of  the  Company  underwent  no  improve 
ment. 

We  have  seen  by  what  a  succession  of  faults  the 
system  had  been  compromised.  This  conversion  of 
the  public  debt  into  shares  having  been  managed 
imprudently,  the  shares  had  been  carried  to  a  price 
absurdly  exaggerated.  The  fault  having  been  com 
mitted,  the  shares  should  have  been  suffered  to  fall, 
and  have  been  entirely  disconnected  with  the  notes, 
in  order  to  save  the  bank  at  least,  an  institution  of 
immense  utility,  if  not  to  save  the  Indian  Company, 
the  success  of  which  was  of  much  less  importance. 
Instead  of  this,  there  was  an  effort  to  save  the 
shares  by  means  of  the  notes,  which  effort  compro 
mised  both.  After  this,  it  was  necessary  to  keep 
pace  with  the  discredit,  and  to  declare  it  as  fast  as 
it  progressed,  so  that  no  one  should  be  compelled  to 
accept  a  false  value.  But  by  declaring  it,  and  then 


*     RETURN    TO    GOVERNMENT    SECURITIES.  167 

revoking  the  declaration,  everything  was  at  once 
lost.  The  public,  after  this,  wished  to  have  nothing 
to  do  either  with  shares  or  notes.  There  was 
nothing  left  but  to  withdraw  both  as  promptly  as 
possible.  A  prudent  demolition  was  all  that  re 
mained  to  be  accomplished. 

Law  still  presided  over  financial  operations  with 
out  appearing  to  control  them.  He  was  obliged,  on 
the  1st  of  June,  to  make  a  first  atonement  to  the 
public,  by  revoking  the  prohibition  to  retain  more 
than  five,  hundred  francs  of  coin.  This  was  the 
most  vexatious  measure  of  the  system,  and  the  revo 
cation  of  it  was  the  most  urgent. 

Of  the  six  hundred  thousand  shares  there  had 
been  three  hundred  thousand  returned  to  the  bank. 
The  royal  treasury  had  returned  one  hundred  thou 
sand,  which  made  four  hundred  thousand  which  the 
public  no  longer  wanted.  In  exchange  for  them 
there  were  two  billions  six  hundred  and  ninety-six 
millions  four  hundred  thousand  bank-notes  in  cir 
culation.  These  rejected  shares  must  be  abolished, 
and  an  investment  in  government  securities  offered 
for  this  mass  of  notes ;  that  is  to  say,  a  return  must 
be  made  to  the  old  form  of  the  public  debt,  after 
frightful  disasters  and  thousands  of  ruined  fortunes. 
On  the  3d  of  June  the  four  hundred  thousand  shares 
in  the  bank  were  annulled.  The  government 


168  MEMOIK   OF   JOHN   LAW. 

voluntarily  sacrificed  the  one  hundred  thousand 
which  it  had  deposited,  and  released  the  Company 
from  its  debt  of  nine  hundred  millions.  This  left 
two  hundred  thousand  shares  in  circulation,  one- 
third  of  the  whole  amount.  But,  in  return,  the 
forty-eight  millions,  which  were  assigned  to  the 
Company  upon  the  collection  of  the  revenue,  were 
retracted  to  serve  for  the  creation  of  the  new 
pensions.  Of  its  eighty  millions  of  income,  the 
Company  thus  lost  forty-eight,  and  retained  only 
thirty-two.  The  two  hundred  thousand  shares  re 
maining  in  circulation  gained  by  the  annulment  of 
the  four  hundred  thousand,  since  their  number  was 
reduced  two-thirds,  while  they  did  not  lose  two- 
thirds  of  their  income.  In  consideration  of  this, 
an  assessment  of  three  thousand  francs  a  share  was 
asked,  which  might  be  paid  either  in  shares  or 
notes.  If  in  shares,  it  would  take  one  in  three — 
that  is,  three  shares  would  be  exchanged  for  two. 
It  seems  from  this,  that  the  shares  were  valued  at 
six  thousand  francs,  as  one  sufficed  to  pay  two 
assessments  of  three  thousand  francs.  The  assess 
ment  was  not  compulsory.  The  Company  promised 
a  dividend  of  two  hundred  francs  upon  \\  e  shares 
not  paying  the  assessments,  and  three  hi  ndred  and 
sixty  upon  the  others.  It  calculated  upon  an  in 
come  of  forty  millions  at  least,  and  seventy-two  at 


CREATION   OF  ANNUITIES.  169 

most — an  entirely  exaggerated  expectation ;  for,  by 
tlie  withdrawal  of  the  forty-eight  millions  on  the 
collection  of  the  revenue,  the  income  was  reduced 
to  thirty-two  millions.  However,  by  this  demand 
for  an  assessment,  six  hundred  millions  of  notes 
might  be  recalled,  or  the  two  hundred  thousand 
remaining  shares  might  be  reduced  one-third. 

By  decrees  of  the  10th  and  20th  of  June,  the  forty- 
eight  millions  allowed  the  Company  on  the  collec 
tion  of  the  revenue  was  again  appropriated  by  the 
government,  for  the  service  of  the  new  pensions, 
etc.,  which  it  proposed  to  create.  By  the  decrees 
of  the  24th  of  February  and  the,  5th  of  March,  a 
subscription  had  been  opened  for  ten  millions  per 
petual  annuities  upon  the  Company  and  four  mil 
lions  of  life  annuities.  Upon  these  there  had  been 
subscribed  one  million  of  perpetual  annuities  and 
four  millions  of  life  annuities,  which  made  five  mil 
lions  to  deduct  from  the  forty-eight  millions  re 
assigned  to  the  government.  Forty-three  millions 
remained  to  be  employed  in  the  creation  of  new 
annuities.  There  were  twenty-five  millions  consti 
tuted  upon  a  capital  of  a  billion,  which  was  two 
and  a  half  per  cent.  There  remained  eighteen  mil 
lions  to  be  disposed  of  according  to  circumstances. 

As  this  investment  would  not  suit  those  holders  of 
notes  who  were  engaged  in  commerce,  accounts  cur 

8 


\ 


170  MEMOIR  OF  JOHN   LAW. 

rent  were  opened  with  them  at  the  bank  on  the  13th 
of  July,  with  the  double  design  of  offering  them  a 
suitable  employment  for  their  notes,  and  to  keep 
up  the  exercise  of  the  functions  of  the  bank.  The 
money  for  these  current  accounts  was  to  be  fur 
nished  in  notes,  and  not  to  exceed  six  hundred  mil 
lions.  For^this  capital  the  bank  undertook  to  open 
accounts  with  business  men,  and  to  make  their  pay 
ments  through  the  bank.  The  billion  of  annuities 
and  the  six  hundred  millions  in  current  accounts 
would  reduce  the  two  billions  six  hundred  and 
ninety-six  millions  of  notes  which  burdened  the  cir 
culation  to  about  one  billion.  The  assessment  de 
manded  on  the  shares,  and  the  eighteen  millions 
remaining  upon  the  product  of  the  revenue,  were  so 
much  means  of  extinguishing  this  billion. 

Such  were  the  measures  taken  to  abolish  the 
system.  But  the  recall  of  the  bank-notes  was  not 
effected  without  difficulty.  The  annuities  of  two 
and  a  half  per  cent,  were  not  subscribed  for  with 
enthusiasm,  because  the  creditors  of  the  state  were 
not  contented  to  receive  tha^Jnterest  in  the  place 
of  the  four  per  cent,  which  they  received  formerly. 
Yet  the  two  and  a  half  per  cent,  was  sufficient ;  for, 
according  to  the  then  value  of  the  notes,  it  amounted 
to  five  per  cent.  But  the  importunate  creditors, 
who  had  received  the  notes  at  their  full  value,  did 


FAILTJEE  OF  THE   NEW  PLAN.  171 

not  reason  in  this  manner,  and  believed  that  two 
and  a  half  per  cent,  was  all  they  received,  and  really 
that  was  all  they  obtained  on  their  original  capital. 
So  they  could  not  readily  bring  themselves  to  make 
this  grievous  sacrifice  by  subscribing  for  the  newly- 
created  annuities.  The  traders  were  not  more  eager 
to  open  their  current  accounts,  because  the  bank 
was  distrusted,  and  the  established  value  of  money 
was  of  little  use  in  commercial  transactions.  Of 
the  six  hundred  millions  only  two  were  subscribed. 
The  example  which  Law  set,  by  subscribing  five 
millions  for  annuities  and  accounts  current,  had  no 
influence.  Neither  would  the  holders  of  the  two 
hundred  thousand  shares  pay  the  requested  assess 
ments,  because  they  had  no  confidence  either  in  the 
dividend  of  three  hundred  and  sixty  francs,  or  even 
in  that  of  two  hundred. 

Although  the  price  of  the  shares  was  fixed  at  six 
thousand  francs  for  the  assessment,  they  were  worth 
much  less  for  purposes  of  traific.  Their  decline  was 
more  rapid  than  that  of  the  notes,  and  they  had 
fallen  to  five  thousand  francs.  Five  thousand  francs 
in  bank-notes  were  worth  scarcely  twenty-five  hun 
dred  in  coin.  So  the  share  which  was  worth 
eighteen  thousand  francs  in  November  and  Decem 
ber,  1719,  was  worth  only  twenty-five  hundred  in 
June,  1720,  eight  months  after.  Although  the 


172  MEMOIR   OF  JOHN  LAW. 

bank  was  exempted  from  paying,  at  sight,  notes  of 
above  one  hundred  francs,  by  the  law  which  prohi 
bited  the  payment  in  coin  of  sums  above  that 
amount,  it  was,  nevertheless,  constrained  to  pay 
those  below  that  sum.  To  conceal  the  exhaustion 
of  its  treasury  it  paid  very  slowly,  and  often  in  the 
smallest  coin.  Its  offices  were  opened  late  and 
closed  early,  so  that  the  bills  of  one  hundred  francs, 
and  less,  were  far  from  being  equivalent  to  coin,  on 
account  of  the  difficulty  of  converting  them. 

There  were  in  notes  of  10,000  francs 1,134,000,000  frs. 

"         "  "      "    1,000     "     1,223,200,000  " 

"         "  "      "        100     "     299,200,000  " 

"          "  "      "         10     "     40,000,000" 


Making  a  total  of   2,696,400,000  " 

The  bank  being  required  to  pay  only  notes  of  one  hundred  francs 
and  ten  francs,  was  obliged  to  find  coin  only  for  the  sura  (in  notes 

of  100  fraucs)  of 299,200,000  frs. 

And  the  sum  (in  notes  of  10  francs)  of 40,000,000  " 

Total 339,200,000  " 

This  explains  the  decline  in  the  notes  which  were  not  converti 
ble,  and  the  reason  why  the  bank  was  able,  sometimes,  to  pay  on 
demand. 


NOTES  TO  CHAPTER  YHL 

REASONS  AND   CONSEQUENCES   OF  THE   FAILURE. 

(1.)  THERE  is  abundance  of  authority  that  Law 
was  opposed  to  the  fatal  edict  (21st  of  May)  which 
changed  the  relations  of  coin  to  the  bank-notes. — 
WOOD. 

(2.)  Such  were  the  consequences  of  the  fatal  edict 
of  the  21st  of  May,  a  piece  of  folly  hardly  to  be 
equalled  in  the  annals  of  any  nation,  and  not  easily 
to  be  accounted  for  on  any  other  supposition  than 
as  a  contrivance  of  the  French  ministry  to  free  them 
selves  from  a  formidable  rival,  to  accomplish  which 
object  they  did  not  hesitate  to  bring  the  kingdom 
to  the  brink  of  destruction.  But  it  is  by  no  means 
so  easy  to  account  for  the  regent's  giving  his  con 
sent  to  a  decree  that,  besides  being  a  breach  of 
public  faith,  was  an  experiment  full  of  dangers, 
by  which  neither  himself  nor  any  other  could  pos 
sibly  be  benefited.  Had  no  such  step  been  taken, 
and  his  highness  allowed  the  system  to  go  on  in  the 

173 


174:  MEMOIR   OF   JOHN  LAW. 

way  supposed  to  have  been  at  first  intended,  it  is 
not  unreasonable  to  imagine  that,  infatuated  as  the 
people  were  to  acquire  shares  of  the  India  Com 
pany,  the  sums  paid  to  the  national  creditors  would 
have  been  retired  with  the  sale  of  less  that  200,000, 
consequently,  the  public  would  then  have  had 
about  400,000  shares  in  their  hands.  The  Company 
could,  in  this  case,  easily  have  made  good  their  en 
gagement  to  pay  a  dividend  of  200  livres  on  each  of 
these  shares,  as  we  have  seen  that,  on  a  very  mode 
rate  computation,  they  enjoyed  an  annual  revenue 
of  about  eighty  millions,  administered  by  them 
selves,  and  capable  of  great  increase.  By  destroy 
ing  the  notes  retired,  none  would  have  remained  in 
circulation  except  such  as  had  been  issued  for  value 
by  the  bank,  which  could  thus  have  answered  all 
demands  made  upon  it.  The  Company,  being 
thereby  relieved  from  every  apprehension  of  suffer 
ing  by  a  run  upon  them,  would  have  had  leisure  to 
direct  their  attention  to  the  improvement,  by  all 
possible  means,  of  the  home  revenue,  the  culture  of 
the  colonies,  and  the  extension  of  their  commerce. 
In  this  case,  what  might  not  have  been  expected 
from  the  exertions  of  a  body  of  men,  possessed  of 
almost  unlimited  credit,  whose  funds  were  immense, 
who  had  in  their  hands  the  whole  foreign  trade  and 
possessions,  and  all  the  public  revenues  of  the 


FEASIBILITY   OF  LAW'S   SCHEME.  175 

kingdom,  and  who,  moreover,  enjoyed  the  declared 
protection  of  government,  and  the  implicit  confi 
dence  of  the  people  I  The  opinion  that  the  system 
was  a  monstrous  and  impracticable  monopoly  ap 
pears  to  have  been  taken  up  without  sufficient 
grounds.  All  preceding  attempts  to  establish  a 
flourishing  trade  to  the  Indies  had  failed  of  success, 
from  deficiency  of  funds  in  the  parties  concerned, 
so  that  it  was  far  from  being  an  improper  step  to 
endeavor  to  settle  the  commerce  to  these  places  on 
a  solid  and  extensive  basis,  the  more  especially  as 
the  exclusive  privilege  of  trading  thereto  was 
granted  to  the  Company  only  for  a  limited  period. 
With  regard  to  taking  the  great  farms  out  of  the 
hands  of  the  farmers-general,  it  is  apprehended  that 
the  propriety  of  that  transfer  will  not  be  disputed, 
when  the  enormous  profits  made  by  those  extrava 
gant  and  luxurious  financiers,  and  their  unwarrant 
able  exactions,  are  considered ;  while,  on  the  other 
hand,  the  superior  advantages  of  assuming  these 
favors  into  the  hands  of  a  company,  in  which  no 
person  that  could  command  a  moderate  sum  was 
excluded  from  holding  a  share,  is  evident.  By 
consolidating  into  one  channel  every  branch  of  the 
public  revenue,  all  unnecessary  charges  of  collection 
and  mismanagement  were  avoided  and  consequently 


176  MEMOIR   OF   JOHN   LAW. 

the  taxes  must  be  levied  and  their  amounts  remitted 
at  the  cheapest  rate  possible.  At  least  it  must  be 
acknowledged  that  the  idea  was  truly  great ;  and 
Mr.  Law's  being  able  to  carry  matters  to  the  length 
he  did,  will  appear  astonishing  indeed  when  we  con 
sider  what  reception  would  in  this  country  await  a 
similar  attempt  to  unite  the  public  revenues,  the 
mint,  the  banks,  the  East  India  and  other  privileged 
companies,  into  the  hands  of  one  great  association. 
The  very  low  price  at  which  the  shares  of  the  India 
Company  were  originally  fixed  must  however  be 
allowed  to  have  been  a  capital  error,  though,  per 
haps,  in  some  measure  necessary  to  raise  the  billets 
ffetat  from  the  discredit  into  which  they  had  fallen. 
— WOOD. 

(3.)  Among  the  caricatures  that  were  abundantly 
published,  and  that  showed  as  plainly  as  graver 
matters  that  the  nation  had  awakened  to  a  sense  of 
its  folly,  was  one,  a  fac-simile  of  which  is  preserved 
in  the  "  Memoires  de  la  R'egence."  It  was  thus 
described  by  its  author :  The  Goddess  of  Shares  in 
her  triumphal  car,  driven  by  the  Goddess  of  Folly. 
Those  who  are  drawing  the  car  are  impersonations 
of  the  Mississippi,  with  his  wooden  leg,  the  South 
Sea,  the  bank  of  England,  the  Company  of  the 


CARICATURES.  177 

West  of  Senegal,  and  of  various  assurances.  Lest 
the  car  should  not  roll  fast  enough,  the  agents  of 
these  companies,  known  by  their  long  fox-tails  and 
their  cunning  looks,  turn  round  the  spokes  of  the 
wheels,  upon  which  are  marked  the  names  of  the 
several  stocks  and  their  value,  sometimes  high  and 
low  according  to  the  turns  of  the  wheel.  Upon  the 
ground  are  the  merchandise,  daybooks  and  ledgers 
of  legitimate  commerce,  crushed  under  the  chariot 
of  Folly.  Behind  is  an  immense  crowd  of  persons 
of  all  ages,  sexes,  and  conditions,  clamoring  after 
Fortune,  and  fighting  with  each  other  to  get  a  por 
tion  of  the  shares  which  she  distributed  so  bounti 
fully  among  them.  In  the  clouds  sits  a  demon, 
blowing  bubbles  of  soap,  which  are  also  the  objects 
of  the  admiration  and  cupidity  of  the  crowd,  who 
jump  upon  one  another's  backs  to  reach  them  ere 
they  burst.  Right  in  the  pathway  of  the  car,  and 
blocking  up  the  passage,  stands  a  large  building, 
with  three  doors,  through  one  of  which  it  must  pass 
if  it  proceeds  further,  and  all  the  crowd  along  with 
it.  Over  the  first  door  are  the  words,  "  Hopital  des 
Foux,"  over  the  second,  "Hopital  des  Malades," 
and  over  the  third,  " Hopital  des  Gueux"  Another 
caricature  represented  Law  sitting  in  a  large 
caldron,  boiling  over  the  flames  of  popular  mad 
ness,  surrounded  by  an  impetuous  multitude,  who 

8* 


178  MEMOIR  OF  JOHN   LAW. 

were  pouring  all  their  gold  and  silver  into  it,  and 
receiving  gladly  in  exchange  the  bits  of  paper  which 
he  distributed  among  them  by  handfuls. — MAOKAY'S 
Popular  Delusions. 


CHAPTER  IX. 

"Spoils  of  the  Mississippians " — Further  efforts  to  bring  in  the 
notes — Men  suffocated  in  the  crowd  at  the  bank — Mob  pursue 
Law — He  seeks  protection  at  the  palace  of  the  Regent — Bank 
closed — Tampering  with  the  currency — Severities  towards  the 
Mississippians — Final  abolition  of  the  System — Law  quits  France 
— Confiscation  of  his  property. 


179 


OHAPTEK   IX. 

THE  stockjobbers  still  sought  to  assemble  for 
buying  and  selling.  Driven  from  the  me  Quin- 
c^mpoix,  they  formed  groups  in  the  place  Yendome. 
The  existence  of  an  open  office  at  the  bank,  for  the 
exchange  of  shares  and  notes,  could  no  longer  be 
an  objection  to  their  assembling,  so  they  were 
authorized  to  assemble.  They  raised  tents  in  the 
place  Yendome  on  account  of  the  excessive  heat  in 
July.  Under  these  tents  various  bargains  were 
made — shares  were  sold  for  notes ;  notes  for  specie 
or  merchandise,  consisting  of  jewelry,  precious 
stones,  ornaments,  furniture,  and  even  horses  and 
carriages  which  had  belonged  to  ruined  speculators. 
It  was  a  fair  where  were  sold  the  spoils  of  the 
Mississippians.  The  public  called  it  Mississippi 
overthrown. 

Law  conceived  a  new  means  of  insuring  the 
return  of  notes,  which  had  been  heretofore  neg 
lected. 

The  Company  had  certain  privileges  for  nine 
years  only,  and  others  for  fifty.  Law  prepared  a 


181 


182 


MEMOIR   OF -JOHN   LAW. 


decree  which  secured  these  privileges  to  it  in  per 
petuity,  on  the  condition  that  six  hundred  millions 
of  notes  should  be  called  in.  It  was  a  more  certain 
method  than  the  assessments  on  the  bank  accounts. 
The  decree  was  presented  to  parliament  on  the  17th 
of  July. 

The  same  day  there  occurred  a  very  important 
incident. 

We  have  just  said  that  the  bank  was  not  obliged 
to  pay  notes  of  over  one  hundred  francs.  It  paid 
them  slowly,  and  employed  all  imaginable  artifices 
to  avoid  the  payment  of  them.  Nevertheless,  its 
coffers  were  almost  exhausted,  and  it  was  necessary 
to  authorize  it  to  confine  its  disbursements  to  the 
payment  of  notes  of  ten  francs  only.  The  people 
rushed  to  the  bank  in  crowds,  to  realize  their  notes 
of  ten  francs,  fearing  that  these  would  soon  share 
the  fate  of  those  of  one  hundred.  The  pressure 
was  so  great  that  three  persons  were  suffocated. 
The  indignant  mob,  ready  for  any  excess,  already 
menaced  the  house  of  Law.  He  fled  to  the  Palais 
Royal  to  seek  an  asylum  near  the  regent.  The 
mob  followed  him,  carrying  the  bodies  of  the  three 
who  had  been  suffocated.  The  carriage  which  had 
just  conveyed  him  was  broken  to  pieces,  and  it  was 
feared  that  even  the  residence  of  the  regent  would 
not  be  respected. 


COOLNESS   OF   THE  XJHIEF   OF   POLICE.  183 

The  gates  of  the  court  of  the  Palais  Koyal  had 
been  closed;  the  Duke  of  Orleans,  with  great 
presence  of  mind,  ordered  them  to  be  opened.  The 
crowd  rushed  into  the  court  and  suddenly  stopped 
upon  the  steps  of  the  palace.  Leblanc,  the  chief 
of  police,  advanced  to  those  who  bore  the  corpses, 
and  said,  "  My  friends,  go  place  these  bodies  in  the 
Morgue,  and  then  return  to  demand  your  pay 
ment."  These  words  calmed  the  tumult;  the 
bodies  were  carried  away  and  the  sedition  was 
quelled. 

In  the  midst  of  these  popular  tumults,  parlia 
ment  assembled  to  act  upon  the  edict  which 
accorded  to  the  Company  its  privileges  in  per 
petuity. 

The  session  was  a  stormy  one,  and  from  time  to 
time  members  would  ask,  in  defiance  of  all 
decency,  if  Law  had  not  yet  been  killed  by  the 
people?  They  were  vexed  to  learn  that  he  had 
found  safety  with  the  regent,  and  took  the 
opportunity  to  refuse  to  enregister  the  edict. 

In  order  to  prevent  the  recurrence  of  these 
popular  outbreaks,  notice  was  given  that  the  bank 
would  be  closed  for  a  few  days,  but,  to  keep  the 
people  quiet,  money-changers  were  distributed  in 
the  principal  public  places  to  receive  a  portion  of 
the  notes  of  ten  francs.  Law  remained  concealed 


184  MEMOIR   OF  JOHN   LAW. 

at  the  Palais  Royal  to  avoid  the  public  sentiment, 
and  the  parliament  was  exiled  to  Pontoise. 

After  this,  measures  succeeded  each  other 
rapidly,  designed  to  call  in  the  paper  in  circulation 
and  hasten  the  complete  abolition  of  the  system. 
Having  been  unable  to  reduce  the  nominal  value 
of  notes  and  shares  one-half,  that  of  coin  was 
doubled.  The  marc  of  gold,  raised  to  eighteen  hun 
dred  francs,  and  that  of  silver  to  one  hundred  and 
twenty,  were  both  to  be  reduced,  from  month  to 
month,  to  their  first  prices,  of  nine  hundred  and  of 
sixty.  This  was  done  to  induce  a  return  of  silver 
into  circulation.  The  measure  was  ruinous  to 
creditors,  who,  having  made  their  bargains  when 
the  marc  of  silver  was  sixty  francs,  were  paid  when 
it  was  one  hundred  and  twenty. 

Decrees  were  then  published  with  the  design  of 
withdrawing  the  bank-notes  as  fast  as  possible.  As 
the  public  were  not  disposed  to  subscribe  for  the 
annuities,  shares  were  again  resorted  to,  and  fifty 
thousand  created  in  order  to  withdraw  the  six  hun 
dred  millions  with  which  the  Company  had  intended 
to  pay  for  the  perpetuity  of  their  privileges.  The 
assessments  were  made  compulsory,  under  penalty 
of  annulment  of  the  shares.  Eight  millions,  of  two 
per  cent,  annuities  were  created  to  furnish  the  cre 
ditors  in  the  provinces  an  opportunity  to  use  their 


FURTHER   DECLINE   OP   THE   SHARES.  185 

securities.  At  last,  to  put  an  end  to  the  circulation 
of  the  notes,  it  was  decided  that  the  notes  of  ten 
thousand  francs  and  those  of  one  thousand,  should 
become  preferred  shares,  with  a  fixed  income  of 
two  per  cent.  They  were  thus  condemned  to  take 
the  form  of  shares,  without  even  having  the  chance 
of  increasing  their  dividend,  if  the  operations  of 
the  Company  should  be  fortunate. 

This  decree,  which  announced  the  approaching 
end  of  the  system,  accelerated  still  more  the  decline 
of  the  notes  of  ten  thousand  and  of  one  thousand 
francs.  The  bank,  in  order  to  conform  to  the  pro 
gressive  depreciation,  had  been  obliged  to  reduce 
the  two  hundred  millions,  furnished  for  opening  the 
accounts  current,  to  fifty  millions.  The  shares  now 
sold  for  only  two  thousand  francs  in  bills,  which 
represented  scarcely  two  hundred  in  silver,  so  that 
the  shares  which  had  sold  for  eighteen  thousand 
francs,  in  November,  1719,  were  worth  only  two 
hundred  in  October,  1Y20. 

The  market  for  stocks,  which  had  been  transferred 
from  the  Place  Yendome  to  the  Hotel  de  Soissons, 
was  again  closed.  Sixty  brokers  were  appointed 
to  act  as  agents  for  sales  and  purchases,  and  all 
assembling  of  speculators  in  public  places  was  pro 
hibited. 

Severities  against  the  rich  Mississippians  were 


186  MEMOIK  OF  JOHN   LAW. 

commenced  in  this  same  month  of  October.  For  a 
long  time,  it  had  been  suspected  that  the  govern 
ment,  following  an  ancient  usage,  would  deprive 
them,  by  means  of  visas  and  chambres  o/rdentes^  of 
what  they  had  acquired  by  stock-jobbing.  A  list 
was  made  of  those  known  to  have  speculated  in 
shares.  A  special  commission  arbitrarily  placed  on 
this  list  the  names  of  those  whom  public  opinion 
designated  as  having  enriched  themselves  by  spe 
culation  in  paper.  They  were  ordered  to  deposit 
a  certain  number  of  shares  at  the  offices  of  the  Com 
pany,  and  to  purchase  the  required  number,  if  they 
had  sold  their  own.  The  realizers  were  thus 
brought  back  by  force  to  the  Company  which  they 
had  deserted.  Eight  days  were  given  to  specula 
tors  of  good  faith  to  make,  voluntarily,  the  prescribed 
deposit.  To  prevent  flight  from  the  country,  it  was 
prohibited,  under  pain  of  death,  to  travel  without  a 
passport. 

These  measures  increased  still  more  the  decline 
of  the  shares.  All  those  whose  names  were  not 
upon  the  list  of  rich  speculators,  and  who  could  not 
tell  what  would  become  of  the  shares  not  yet  de 
posited,  hastened  to  dispose  of  .all  they  retained. 

The  system  wholly  disappeared  in  November, 
1720,  one  year  after  its  greatest  credit.  All  the 
notes  were  converted  into  annuities  or  preferred 


QUITS   PAKIS.  187 


shares,  and  all  the  shares  were  deposited  with  the 
Company.  Then  a  general  Utoisa"  was  'ordered, 
consisting  of  an  examination  of  the  whole  mass  of 
shares,  with  the  purpose  of  annulling  the  greater 
portion  of  those  which  belonged  to  the  enriched 
stockjobbers.  —  (NOTE  1.) 

Law,  foreseeing  the  renewed  rage  which  the  visa 
would  excite,  determined  to  leave  France.  The 
hatred  against  him  had  been  so  violent  since  the 
scene  of  the  17th  of  July,  that  he  had  not  dared  to 
quit  the  Palais  Eoyal.  The  following  fact  will 
give  an  idea  of  the  fury  excited  against  him:  A 
hackman,  having  a  quarrel  with  the  coachman  of  a 
private  carriage,  cried  out,  "There  is  Law's  car 
riage."  The  crowd  rushed  upon  the  carriage,  and 
nearly  tore  in  pieces  the  coachman  and  his  master 
before  it  could  be  undeceived.  —  (JSToTES  2,  3,  4r.) 

Law  demanded  passports  of  the  Duke  of  Or 
leans,  who  granted  them  immediately.  The  Duke 
of  Bourbon,  made  rich  -by  the  system,  felt  under 
obligations  to  Law,  and  offered  money  and  the  car 
riage  of  Madame  de  Prie,  his  mistress.  Law 
refused  the  money  and  accepted  the  carriage.  He 
repaired  to  Brussels,  taking  with  him  only  eight 
hundred  louis.  —  (NOTE  8.) 

Scarcely  was  he  gone  when  his  property,  consist 
ing  of  lands  and  shares,  was  sequestrated. 


188  MEMOIR  OF  JOHN   LAW. 

Law  had  been  imprudent,  culpable,  even,  in  his 
management  of  the  system,  but  he  thought  more  of 
carrying  out  his  views  than  of  making  a  fortune. 
While  the  rich  Mississippicms  had  acquired  for 
tunes  of  forty  or  fifty  millions,  he,  possessor  of  all 
the  treasure  of  the  system,  had  made  scarcely  ten, 
had  invested  them  in  France  and  had  sent  nothing 
abroad.  Able  to  draw  large  sums  in  coin  at  the 
bank,  he  did  not  even  think  to  procure  money  for 
his  journey,  and  owed  to  accident  the  eight  hundred 
louis  which  served  to  pay  his  travelling  expenses. 
His  property  was  sequestrated  on  the  pretext  of  re 
gulating  his  personal  accounts  with  the  Company,  of 
which,  however,  he  was  the  creditor. — (NOTES  5, 6, 7.) 

The  brothers  Paris  were  charged  with  the  execu 
tion  of  the  "visa"  It  extended  to  two  billions  two 
hundred  and  twenty-two  millions  of  the  paper  of 
the  system  still  remaining,  and  consisted  of  shares, 
or  notes  converted  into  preferred  shares.  The  title 
by  which  these  were  held,  by  those  who  had 
deposited  them,  was  investigated,  and  those  belong 
ing  to  lately  enriched  holders  were  annulled,  which 
reduced  the  total  amount  of  paper  to  five  hundred 
millions.  The  public  debt  was  thus  changed — partly 
into  annuities  and  partly  into  shares.  The  capital 
was  nearly  the  same  as  before  the  system,  but  the 
interest  was  very  much  diminished.  There  was  but 


RELICS   OF   LAWS    SYSTEM.  189 

little  more  than  thirty-seven  millions  to  pay,  instead 
of  eighty  millions;  but  a  very  large  number  of 
creditors  had  been  completely  ruined  and  the  public 
credit  was  as  low  as  in  1716.  The  bank  was 
abolished — the  Company,  deprived  of  all  its  privi 
leges  except  that  of  foreign  commerce,  continued 
to  exist  under  the  name  of  the  Indian  Company, 
and  was  all  that  remained  of  the  vast  machine 
which  Law  had  contrived. 


NOTES  TO  CHAPTER  IX. 


LAW'S   PERILOUS   SITUATION. 


(1.)  The  Yisa  appointed  to  settle  this  complicated 
and  difficult  liquidation  consisted  of  fifteen  boards, 
composed  of  Masters  of  Requests  and  Counsellors 
of  the  Great  Council,  who  employed  under  them  no 
less  than  800  clerks;  and,  in  order  to  assist  the 
commissioners  in  their  operations,  copies  of  all  con 
tracts  for  the  transfer  of  property  entered  into 
before  notaries,  betwixt  1st  July,  1719,  and  31st 
December,  1720,  were  directed  to  be  made  out. 
The  effects,  carried  to  the  Yisa  by  511,009  indi 
viduals,  amounted,  as  stated  by  the  proprietors,  to 
2,222,597,491  livres  in  contracts  for  annuities  on 
lives,  perpetual  annuities,  etc.  And  this  sum  the 
commissioners  reduced  to  1,676,501,831  livres,  the 
interest  of  which  may  be  computed  at  forty-eight 
millions  a  year,  partly  consisting  in  life  annuities, 
and  therefore  continually  diminishing.  The  shares 
of  the  India  Company  were  in  like  manner  reduced 
from  125,024,  with  a  dividend  of  36.0  livres  per 

190 


NOTES.  191 

annum  each,  to  only  55,316  (afterward  increased  to 
56,000),  each  having  a  dividend  of  100  livres  the  first 
year,  and  150  livres  every  subsequent  year,  exclu 
sive  of  their  proportion  of  the  profits  of  the  trade. 
Thus,  in  consequence  of  these  arbitrary  proceedings, 
the  annual  interest  payable  by  the  king  was  dimin 
ished  to  about  fifty-six  millions  of  livres,  by  which 
his  majesty  was  a  gainer  of  upwards  of  forty  mil 
lions  a  year,  and  many  of  the  public  creditors  were 
reduced  to  the  utmost  misery  and  distress. — 
WOOD. 

(2.)  In  the  midst  of  these  disordered  movements, 
the  situation  of  Law  had  become  very  perilous. 
The  Count  de  Braglie,  who  affected  great  frankness, 
had  dared  to  say  at  the  table  of  the  regent,  and 
looking  the  director  in  the  face,  that  he  would  die 
on  the  gallows.  Bets  were  made  on  the  London 
Exchange  that  he  would  be  hung  in  September; 
Law,  himself,  brave  as  he  was,  was  frightened  and 
did  not  conceal  it.  He  feared  that  some  intrigue 
of  the  court,  or  some  riot  in  the  street,  would  put  a 
tragic  end  to  his  existence.  "I  am,"  said  he,  "like 
the  chicken  with  golden  eggs,  who  was  worth  no 
more,  dead,  than  a  common  fowl." — COCHUT. 

(3.)  The  parliament  was  sitting  at  the  time  of  this 


192  MEMOIR   OF  JOHN  LAW. 

uproar,  and  the  president  took  upon  himself  to  go 
out  and  see  what  was  the  matter.  On  his  return, 
he  informed  the  councillors  that  Law's  carriage  had 
been  broken  by  the  mob.  All  the  members  rose 
simultaneously,  and  expressed  their  joy  by  a  loud 
shout,  while  one  man,  more  zealous  in  his  hatred 
than  the  rest,  exclaimed,  "  And  Law  himself ^  is  he 
torn  to  pieces?" — MACKAY'S  Popular  Delusions. 

(4.)  Every  epithet  that  popular  hatred  could 
suggest  was  showered  upon  the  regent  and  the  un 
happy  Law.  Coin,  to  any  amount  above  five  hun 
dred  livres,  was  an  illegal  tender,  and  nobody  would 
take  paper  if  he  could  help  it.  E"o  one  knew  to 
day  what  his  notes  would  be  worth  to-morrow. 
"  Never,"  says  Duclos,  in  his  "  Secret  Memoirs  of 
the  Regency,"  "  was  seen  a  more  capricious  govern 
ment — never  was  a  more  frantic  tyranny  exercised 
by  hands  less  firm.  It  is  inconceivable  to  those 
who  were  witnesses  of  the  horrors  of  those  times, 
and  who  look  back  upon  them  now  as  on  a  dream, 
that  a  sudden  revolution  did  not  break  out — that 
Law  and  the  regent  did  not  perish  by  a  tragical 
death.  They  were  both  held  in  horror,  but  the 
people  confined  themselves  to  complaints;  a 
sombre  and  timid. despair,  a  stupid  consternation, 
had  seized  upon  all,  and  men's  minds  were  too  vile 


NOTES.  193 

even  to  be  capable  of  a  courageous  crime."  There 
was  still  one  more  trial  left :  on  the  12th  of  Novem 
ber,  he  having  appeared  at  the  bank,  they  called  him 
knave  and  thief  to  his  face.  He  left,  his  head  high 
and  his  look  disdainful,  and  only  thought  to  prepare 
for  departure. — COCHUT. 

(5.)  At  his  last  interview  with  the  Due  d'Orleans, 
it  is  reported  that  Mr.  Law  said,  "  My  Lord,  I  ac 
knowledge  that  I  have  committed  great  faults ;  I 
did  so  because  I  am  but  a  man,  and  all  men  are 
liable  to  err ;  but  I  declare  to  your  royal  highness 
that  none  of  them  proceeded  from  knavery,  and 
that  nothing  of  that  kind  will  be  found  in  the  whole 
course  of  my  conduct." 

The  absurdity  of  this  last  accusation  is  evident ; 
and  with  respect  to  the  charge  of  knavery,  a  very 
strong  proof  of  the  uprightness  of  his  intentions 
arises  from  the  circumstance  of  vesting  his  whole 
acquisitions  in  landed  property  in  France,  not  re 
mitting  any  part  thereof  to  foreign  countries,  which 
could  have  been  done  with  the  utmost  facility,  and 
obliging  his  immediate  connections,  particularly  his 
brother  William,  and  his  confidential  secretary, 
Robert  Neilson,  to  follow  the  same  honorable  line 
of  conduct.  The  amount  of  Mr.  Law's  fortune  at 
the  conclusion  of  the  system,  will  afford  another 


194  MEMOIR   OF  JOHN   LAW. 

refutation  of  the  charge.  The  following  enumera 
tion  of  his  purchases  in  France  being  stated  on  the 
authority  of  his  nephew,  M.  Law  de  Lauriston : 


Le  Marquisat  d'Effiat  (en  Auvergne) 800,000  liv. 

La  Terre  de  la  Riviere    900,000  " 

Le  Marquisat  de  Toucy 160,000  " 

La  Terre  de  la  Marche    120,000" 

La  Terre  de  Roissy 650,000  " 

La  Terre  de  Orcher 400,000  " 

Terre  et  Bois  de  Breau 160,000  " 

Marquisats  de  Charleville  et  Bacqueville 330,000  " 

La  Terre  de  Beeville 200,000  " 

La  Terre  de  Fontaine  Rome. 130,000  " 

La  Terre  de  Lerville 110,000  " 

La  Terre  d'Yrille 200,000  " 

La  Terre  de  la  GerpouvUle 220,000  " 

La  Terre  de  Faucarville  (en  Normandie) 820,000  " 

La  Terre  de  Guermande 160,000  '* 

Hotel  Mazarin,  et  Emplacemens  Rue  Vivienne  1,200,000  " 

Emplaceraens  Rue  de  Varenne 110,000  u 

Emplacemens  de  la  place  Louis  le  Grand 260,000  " 

Partie  du  fief  de  la  Grange  Bateline 150,000  " 

Marais  ou  Chantiers  du  Fauxbourg  St.  Honore    160,000  " 

Maisons,  surtout  dans  Paris 700,000  " 

Le  Domain  de  Bourget 90,000  " 

Quelques  petits  terres,  comme  Valan$ay,  St.  Su- 

plice,  etc. 350,000  " 

7,850,000  " 


NOTES.  195 

(6.)  Besides  the  above,  it  is  said  that  he  acquired 
Lislebonne  from  the  Marchioness  de  Beuveron,  at 
the  price  of  500,000  livres,  as  also  Little  Kambouil- 
let  at  180,000  livres ;  made  offer  of  1,700,000  livres 
to  the  Duke  de  Sully  for  the  Marquisate  of  Eosny, 
purchased  the  valuable  library  of  the  Abbe"  Bignon 
at  the  price  of  180,000  livres,  and  bought,  for 
150,000  livres,  the  Secretaire  du  Koi,  for  the  sake 
of  the  privileges  of  nobility  attached  to  that  office. 
But  the  making  of  these  purchases  was  reckoned  a 
piece  of  policy  necessary  for  the  support  of  his  own 
credit,  and  of  that  of  the  India  Company ;  and  so 
strict  a  connection  subsisted  between  these,  that  it 
was  remarked  on  disposing  of  part  of  his  landed 
property,  people  began  to  speak  in  very  dubious 
terms  of  his  circumstances,  and  the  price  of  shares 
suffered  a  depression. — WOOD. 

(7.)  It  would  seem  that  Mr.  Law  originally  pos 
sessed  10,500  shares  of  the  India  Company.  Of 
these  he  voluntarily  gave  up  2,000  to  the  company 
in  October,  1720  ;  3,000  were  deposited  in  security 
of  a  debt  of  £96,000  sterling,  due  from  him  to  the 
Earl  of  Londonderry,  Governor  Harrison,  and  other 
gentlemen ;  and  500  were  assigned  for  the  liquida 
tion  of  an  unjust  claim  against  him,  to  be  hereafter 
noticed. 


196  MEMOIR    OF   JOHN   LAW. 

The  deficiency  of  eight  shares  of  the  remaining 
5,000,  appears  to  have  been  owing  to  the  following 
circumstance  :  Soon  after  his  elevation  to  the  office 
of  Comptroller-General  he  made  his  appearance  in 
the  Rue  Quincampoix ;  during  the  confusion  occa 
sioned  by  the  crowd  pressing  to  see  him,  and  crying 
out  Vive  le  Roi  et  Monsieur  Law,  a  lady  had  her 
pocket  picked  of  near  100,000  livres  in  notes.  On 
being  informed  thereof,  Mr.  Law  generously  pre 
sented  her  with  shares  to  the  amount  of  what  she 
had  lost. — WOOD. 

(8.)  Mr.  Law  arrived  at  Brussels  in  the  morning 
of  the  22d  December,  1720,  passing  under  the 
name  of  M.  Du  Jardin ;  but  as  soon  as  it  was  known 
who  he  really  was,  General  Wrangle  the  governor, 
the  Marquis  de  Pancalliers  and  several  of  the  prin 
cipal  persons  in  that  city  went  to  pay  their  respects 
to  him.  He  waited  on  the  Marquis  de  Prie  the 
same  afternoon  at  five  o'clock,  and  afterwards 
accompanied  Madame  de  Pancalliers  to  the  theatre 
where  a  vast  concourse  of  people  were  assembled 
to  behold  so  extraordinary  a  character.  Next  day, 
the  23d,  the  Marquis  de  Prie,  returning  Mr.  Law's 
visit  in  great  state,  brought  him  home  in  his  coach 
to  a  most  sumptuous  entertainment,  at  which  were 
present  several  persons  of  the  highest  quality. 


NOTES.  .  197 

That  evening  Mr.  Law  went  again  to  the  play,  and, 
after  it  was  over,  supped  with  the  Marquis 
d'Esquiblache.  On  the  24th  he  dined  a  second 
time  with  the  Marquis  de  Prie,  to  whom,  having 
notified  his  intention  of  leaving  Brussels  the  same 
evening,  that  nobleman  ordered  passports  to  be  got 
ready  ;  and  Mr.  Law  accordingly  set  out  at  nine  at 
night,  accompanied  by  his  son. 

He  came  to  Yenice  early  in  January,  1721,  still 
passing  under  the  name  of  Mr.  Du  Jardin,  and  con 
tinued  in  that  city  two  months,  partaking  of  all  the 
pleasures  the  Carnival  afforded,  and  living  on 
terms  of  intimacy  with  the  imperial  and  French 
Ambassadors.  The  famous  cardinal  Alberoni,  the 
Spanish  minister,  coming  there  in  February,  had  an 
interview  with  Mr.  Law ;  and  it  was  reported  that 
the  Chevalier  de  St.  George  also  arrived  incognito 
and  had  a  conference  with  these  ministers,  in  the 
Capuchin  monastery.  "Whether  this  last  particular 
was  true  or  not,  cannot  now  be  certainly  known ; 
only  it  seems  that  at  this  period  the  chevalier  was 
not  seen  publicly  at  Rome  for  several  days,  and 
when  he  appeared  again  he  looked  so  well,  that 
little  credit  was  given  to  the  report  that  had  been 
circulated  of  his  indisposition.  In  the  meantime, 
the  most  extraordinary  stories  were  told  of  Mr. 
Law,  tending  to  impress  people  with  an  idea  of  his 


198  MEMOLB   OF   JOHN   LAW. 

being  possessed  of  immense  wealth.  It  was  said 
that  160,000  pistoles  had  been  lodged  on  his 
account  in  the  bank  of  the  Holy  Ghost  at  Kome 
by  some  persons  unknown ;  that  he  had  offered  a 
vast  sum  to  be  admitted  into  the  order  of  Yenetian 
nobility ;  and  that  his  son  was  to  be  married  to  a 
daughter  of  the  Due  de  Cesarini,  who  had  a  fortune 
of  100,000  crowns ;  and  that  he  had  drawn  bills  of 
exchange  to  the  amount  of  250,000  pistoles.  While 
such  reports  were  spread,  Mr.  Law  found  himself 
under  the  necessity,  in  order  to  secure  himself 
against  the  claims  of  pretended  creditors,  of  having 
his  name  enrolled  in  the  list  of  Roman  citizens,  it 
being  one  of  the  privileges  t)f  that  body  to  be 
exempted  from  arrest  and  prosecution  from  debt,  at 
the  suit  of  any  other  than  a  fellow  burgher. 
Having  taken  this  necessary  precaution,  he  left 
Venice  on  the  15th  of  March,  for  Ferrara,  on*  his 
way  to  Rome,  but  receiving  intelligence  that  some 
of  his  creditors  had  assigned  their  debts  to  a 
Roman  citizen,  who  had  concerted  measures  to 
have  him  arrested  immediately  on  his  arrival,  he 
judged  it  advisable  to  return  to  Yenice.  After 
some  stp-y  there  he  travelled  through  Bohemia  and 
Germany  to  Hanover,  where  he  had  the  honor  of 
an  audience  of  Prince  Frederick,  and  then  pro 
ceeded  to  Copenhagen.  During  his  residence  at 


FAVORABLE   RECEPTION   OF  LAW.  199 

this  place,  having  received  an  invitation  from  the 
British  Ministry  to  return  to  his  native  country,  he 
embarked  on  board  the  Baltic  squadron,  com 
manded  by  Sir  John  Norris,  being  accommodated 
in  that  admiral's  own  ship.  Landing  at  the  Nore, 
20th  of  October,  1721,  he  proceeded  to  London,  was 
presented  to  King  George  I.,  by  Sir  John,  and  took 
a  house  in  Conduit  street,  where  he  was  daily 
visited  by  numbers  of  persons  of  the  first  quality 
and  distinction. 

The  favorable  manner  in  which  Mr.  Law  was 
received,  occasioned  no  small  umbrage  to  the  anti- 
ministerial  party,  and  was  judged  of  sufficient  im 
portance  to  occupy  the  attention  of  Parliament. 
For  when  the  House  of  Lords  met  on  the  26th  of 
October,  Earl  Coningsby  represented  to  that  august 
assembly  how  dangerous  it  might  be  on  several 
accounts  to  entertain  and  countenance  such  a  man 
as  Mr.  Law,  and  desired  that  a  day  might  be 
appointed  for  taking  this  matter  into  consideration. 
Their  lordships  having  appointed  the  9th  Novem 
ber  for  the  discussion  of  this  business,  Earl 
Coningsby  on  that  day  resumed  his  argument,  say 
ing  that  for  his  part  he  could  not  but  entertain 
great  jealousy  of  a  person  who  had  done  so  much 
mischief  in  a  neighboring  kingdom,  and  who,  being 
so  immensely  rich  as  he  was  reported  to  be,  might 


200  MEMOIR   OF   JOHN   LAW. 

do  a  great  deal  more  hurt  here  by  tampering  with 
many  who  were  grown  desperate  by  being  involved 
in  the  calamity  occasioned  by  the  fatal  imitation  of 
his  pernicious  projects ;  that  this  person  was  the 
more  dangerous,  in  that  he  had  renounced  not  only 
his  natural  affection  to  his  country  and  his  allegi 
ance  to  his  lawful  sovereign,  by  being  naturalized 
in  France,  and  openly  countenancing  the 
Pretender's  friends ;  but,  which  was  worst  of  all, 
and  weighed  most  with  him,  that  he  had  also 
renounced  his  God  by  turning  Roman  Catholic; 
concluding,  that  their  lordships  ought  to  inquire 
whether  Sir  John  Norris  had  orders  to  bring  him 
over.  To  this  last  part  of  the  earl's  speech,  Lord 
Carteret  answered  in  substance,  that  Mr.  Law  had, 
many  years  ago,  the  misfortune  to  kill  a  gentleman 
in  a  duel,  but  that,  having  received  the  benefit  of 
the  king's  clemency,  and  the  appeal  lodged  by  the 
relatives  of  the  deceased  being  taken  off,  he  was 
come  over  to  plead  his  majesty's  gracious  pardon ; 
that  there  was  no  law  to  keep  an  Englishman  out 
of  his  own  country ;  and  as  Mr.  Law  was  a  subject 
of  Great  Britain,  it  was  not  even  in  the  king's  power 
to  hinder  him  from  coming  home  if  he  thought  fit. 
To  this  Lord  Trevor  replied,  that  Mr.  Law  was 
indeed  a  subject  of  Great  Britain,  and,  therefore,  as 
such,  had  an  undoubted  right  to  come  into  the 


LETTER   TO    MRS.    HOWARD.  201 

kingdom ;  but  that  the  circumstance  of  a  person  of 
his  character  being  brought  on  board  of  an  English 
Admiral,  and  at  this  juncture,  might  deserve  the 
consideration  of  the  House.  Earl  Cowper  spoke 
much  to  the  same  effect;  but  the  matter  was 
suffered  to  drop ;  and  Mr.  Law,  on  the  28th  of 
November  following,  pleaded  at  the  bar  of  the 
King's  Bench,  his  majesty's  pardon  for  the  murder 
of  Mr.  Edward  Wilson  in  1694,  being  attended,  on 
this  occasion,  by  the  Duke  of  Argyle,  the  Earl  of 
May,  and  several  other  friends. 

Among  the  letters  to  and  from  the  Countess  of 
Suffolk  is  one  from  Mr.  Law  to  her,  then  Mrs. 
Howard,  dated  Tuesday,  of  this  tenor :  "  Can  you 
not  prevail  on  the  duke  to  help  me  something  more 
than  the  half  year  ?  or  is  there  nobody  that  could 
have  good  nature  enough  to  lend  me  one  thousand 
pounds  ?  I  beg  that  if  nothing  of  this  can  be  done, 
that  it  may  only  be  betwixt  us  two,  as  I  take  you 
as  my  great  friend ;  and  I  am  very  well  assured  of 
it  by  the  honor  I  had  done  me  yesterday  at  court 
by  the  king.  I  had  another  letter  yesterday  from 
France  with  the  same  thing  over  again.  Excuse 
this,  dear  madam,  and  only  put  yourself  in  my 
place  and  know  at  the  same  time  that  you  are  the 
only  friend  I  have." — WOOD. 

9* 


MEMOIR   OF   JOHN   LAW. 

(9.)  "When  I  retired  to  Guermande,  I  had  no 
hopes  that  the  regent  would  have  permitted  me  to 
leave  the  kingdom ;  I  had  given  over  all  thoughts 
thereof  when  your  highness  sent  to  inform  me  of 
his  intention  to  accord  that  permission,  and,  the 
next  day,  immediately  on  receiving  the  passports  I 
set  off.  Consider,  my  lord,  if,  being  in  the  country, 
removed  from  my  papers  and  books,  it  was  in  my 
power  to  put  in  order  affairs  that  required  not 
only  leisure,  but  also  my  presence  in  Paris,  to 
arrange  properly ;  and  if  it  is  not  a  piece  of  great 
injustice  for  the  India  Company  to  wish  to  take 
advantage  of  the  condition  to  which  I  was  re 
duced,  and  of  the  dishonest  conduct  of  clerks,  in 
requiring  from  me  payment  of  sums  I  do  not,  in 
fact,  owe,  and  which,  even  though  I  had  been 
owing,  were,  as  I  have  shown,  expended  for  their 
service,  and  payable  in  actions  or  notes,  of  which 
effects  belonging  to  me  they  at  that  time  had,  and 
still  have,  on  their  books  to  the  amount  of  double 
or  treble  the  sum  they  demand.  No,  my  lord,  I 
cannot  bring  myself  to  accuse  the  Company  of  so 
much  as  the  intention  to  injure  me.  That  Company 
owes  its  birth  to  me.  For  them  I  have  sacrificed 
everything,  even  my  property  and  my  credit,  being 
now  bankrupt,  not  only  in  France,  but  also  in  all 
other  countries.  For  them  I  have  sacrificed  the 


LAW'S   DISINTERESTEDNESS.  203 

interests  of  my  children,  whom  I  tenderly  love,  and 
who  are  deserving  of  all  my  affection ;  these  child 
ren,  courted  by  the  most  considerable  families  in 
France,  are  now  destitute  of  fortune  and  of  esta 
blishments.  I  had  it  in  my  power  to  have  settled 
my  daughter  in  marriage  in  the  first  houses  of  Italy, 
Germany,  and  England  ;  but  I  refused  all  offers  of 
that  nature,  thinking  it  inconsistent  with  my  duty 
to,  and  my  affection  for,  the  state  in  whose  service 
I  had  the  honor  to  be  engaged." — WOOD. 


CHAPTER   X. 

Recapitulation— Comparison  between  this  and  other  financial  catas 
trophes — Reflections. 


s 


IEX70N  HOUSE 


CHAPTEE  X. 

LET  us  recapitulate  the  events  of  the  system,  in 
order  to  review  the  whole  and  understand  more 
clearly  the  causes  of  its  downfall. 

A  Scotchman,  going  from  a  poor  country  into  the 
midst  of  a  rich  one,  had  been  struck  with  the  spec 
tacle  of  an  extensive  circulation,  and  had  been  led 
to  think  that  all  prosperity  originated  in  an  abun 
dance  of  money.  Perceiving  that  banks  had  the 
means  of  increasing  the  amount  of  money  by  giving 
to  paper  the  currency  of  coin,  he  conceived  the  plan 
of  a  general  bank,  uniting  commercial  enterprises 
with  the  administration  of  the  public  revenue,  issu 
ing  paper  money  for  large  payments,  coin  being 
reserved  for  the  smaller;  thus  joining  to  the  crea 
tion  of  an  abundant  circulation  that  of  a  convenient 
and  profitable  investment. 

Repulsed  in  different  countries,  this  Scotchman 
was  listened  to  in  France,  where  he  found  a  govern 
ment  reduced  to  expedients  and  inclined  to  adopt 
new  ideas.  He  established,  at  first,  a  private  bank, 

207 


208  MEMOIR   OF   JOHN   LAW. 

which  the  need  of  an  institution  for  credit  caused  to 
succeed.  He  then  established,  but  entirely  distinct 
from  the  bank,  a  commercial  company,  to  which  he 
granted  privileges  very  different  in  their  nature, 
designing  to  unite  it  with  the  bank  eventually,  and 
complete  the  vast  system  which  he  had  projected. 
The  first  shares  of  the  company  were  delivered  to 
holders  of  different  government  securities  which  re 
presented  the  floating  debt,  so  that  the  creditors  of 
the  Treasury  were  paid  with  the  privileges  which 
constituted  the  fortune  of  the  company.  Soon,  Law 
transferred  to  this  company  the  principal  leases  of 
the  revenue,  on  the  condition  that  it  should  assume 
the  funded  debt,  amounting  to  sixteen  hundred  mil 
lions.  In  this  way  all  the  creditors  of  the  state 
were  gradually  to  become  shareholders  in  the  com 
pany,  and  although  they  received  only  three  per 
cent,  on  their  capital,  they  would  find  their  income 
increased  by  the  profits  of  an  immense  enterprise. 
The  project  was  accomplished  :  the  sixteen  hundred 
millions  were  transferred;  but,  managed  without 
proper  caution,  they  were  precipitated  upon  the 
shares  by  the  apprehension  of  the  public  that  the 
investment  would  be  taken  up  immediately.  The 
shares  rose  to  thirty-six  times  their  cost,  and  the 
debt  which,  transformed  into  shares,  should  have 
been  two  billions  at  the  utmost,  rose  to  eight  or  ten. 


RECAPITULATION.  209 

A  universal  intoxication  seized  the  imagination  of 
everybody.  People  hastened  no  longer  to  seek  an 
investment,  but  to  make  a  fortune  by  the  marvel 
lous  rise  in  the  value  of  capital.  A  crowd  of  landed 
proprietors  sold  their  estates,  which  did  not  increase 
in  value,  to  purchase  this  imaginary  property, 
which  increased  in  value  hourly.  Then  the  holders 
of  the  shares,  better  informed  than  those  who  came 
later,  hastened  to  dispose  of  them  for  wealth  which 
was  real.  This  example  was  followed,  and  every 
one  wished  to  realize.  From  this  moment,  the  fic 
titious  being  contrasted  with  the  real,  the  illusion 
ceased,  and  the  decline  of  the  shares  soon  became 
rapid.  Those  who  had  seen  the  fictitious  capital 
rise  to  ten  billions,  now  saw  it  fall  to  eight,  and 
then  to  six  billions,  and  gave  themselves  up  to  de 
spair.  It  was  proper  to  lament  this  depreciation, 
but  not  to  attempt  to  prevent  a  catastrophe  which 
had  become  inevitable.  Law,  who  had  permitted 
people  to  idolize  him  for  this  sudden  creation  of 
wealth,  committed  the  fault  of  attempting  to  main 
tain  it,  and  he  conceived  the  unfortunate  plan  of 
uniting  the  shares  to  the  bank-notes.  He  attempted 
to  establish  the  value  of  the  notes  by  obliging  the 
use  of  them  in  all  payments  above  one  hundred 
francs,  and  prohibiting  the  possession  of  more  than 
five  hundred  francs  in  coin  at  a  time.  He  then 


210  MEMOIR    OF    JOHN    LAW. 

fixed  the  value  of  the  shares  in  notes,  and  ordered 
that  a  share  should  be  received  at  the  bank  for  nine 
thousand  francs  in  notes.  Immediately,  the  shares 
were  exchanged  for  this  forced  money,  and  for  all 
kinds  of  property  which  could  be  bought.  What 
followed  ?  The  imaginary  capital  declined  in  the 
form  of  notes  as  rapidly  as  it  would  have  done  in 
the  form  of  shares ;  only  the  notes,  which  might 
have  been  saved,  were  sacrificed.  Every  one  who 
had  anything  to  sell  refused  the  notes  in  payment, 
or  demanded  four  times  the  value  of  their  property. 
Only  creditors,  who  were  bound  by  their  contracts, 
were  forced  to  accept  the  notes  at  their  full  nomi 
nal  value,  and  they  were  ruined.  There  was  an 
attempt  to  reduce  the  nominal  value  on  the  21st  of 
May,  in  order  to  end  this  financial  fiction ;  but  a 
violent  clamor  arose,  the  attempt  was  abandoned, 
and  the  fiction  was  suffered  to  continue.  The  ruin 
of  the  system  was  none  the  less  inevitable,  for  so 
monstrous  an  imposition  could  not  maintain  itself. 
The  system  must  be  abolished,  the  shares  and  notes 
converted  into  government  securities,  and  the  old 
form  of  the  public  debt  resumed,  after  the  most 
frightful  disorders,  and  the  ruin  of  so  many  fortunes. 
Such  was  the  system  of  Law,  and  its  sad  results. 

If  this  financial   catastrophe  is  compared  with 
that  of  the  " assignors"  and  of  the  Bank  of  Eng- 


COMPARISON   WITH   OTHER   CRISES.  211 

land  in  the  present  century,  a  remarkable  re 
semblance  will  be  seen  in  the  events  of  a  credit 
system,  and  useful  lessons  can  be  drawn  from  the 
comparison. 

Credit  always  anticipates  the  future,  by  employ 
ing  values  yet  to  be  produced  and  using  them  as 
already  existing. 

Law,  anticipating  the  success  of  a  vast  com 
mercial  enterprise,  represented  the  profits  of  it  by 
shares,  and  used  them  to  pay  the  public  debt. 

The  French  revolution  wished  to  pay  for  the  eccle 
siastical  offices  which  had  been  abolished,  the  debt  of 
the  monarchy  and  the  expenses  of  a  universal  war, 
with  the  national  property ;  this  property  not  being 
disposable,  on  account  of  its  quantity  and  the  want  of 
confidence,  it  anticipated  the  sale  and  represented 
the  results  by  papers  called  "  assignats" — (NOTE.) 

The  Bank  of  England,  by  discounts  and  by  loans 
to  government,  anticipated  and  accepted  as  real 
two  kinds  of  values ;  commercial  bills,  which  repre 
sented  immense  quantities  of  colonial  produce,  dif 
ficult  to  define,  and  the  obligations  of  the  govern 
ment,  values  infinitely  fluctuating  and  depending 
upon  the  success  of  war  and  policy. 

In  these  three  cases  there  was  a  supposititious 
value ;  the  shares  of  Law  represented  commercial 
successes  and  fiscal  products,  which  were  very  un- 


212  MEMOIR   OF   JOHN    LAW. 

certain;  the  assignats  represented  the  price  of 
goods,  which  would  perhaps  be  diverted  from  their 
revolutionary  destination;  the  notes  of  the  Bank 
of  England  represented  obligations  which  the 
government  might  not  be  able  to  fulfill. 

The  crisis  produced  by  loss  of  confidence  differed 
in  the  three  cases  according  to  the  difference  of  cir 
cumstances.  The  prestige  of  a  newly  discovered 
country,  the  sudden  displacement  of  an  enormous 
sum,  caused  the  shares  of  Law  to  rise  in  an  ex 
travagant  manner.  But  a  blind  confidence  must 
soon  lead  to  a  blind  despair.  It  is  well  founded 
confidence,  based  upon  the  real  success  of  labor, 
slow  in  its  progress,  which  alone  is  exempt  from 
these  sudden  reverses  which  resemble  tempests. 
The  assignats  could  not  be  ruined  in  the  same 
manner.  They  could  not  rise,  because  they  repre 
sented  the  value  of  land,  which  is  not  susceptible 
of  increase.  But  as  the  success  of  the  revolution 
began  to  be  distrusted,  and  doubts  arose  as  to  the 
maintenance  of  the  national  sale,  they  declined ; 
and  as  they  declined,  the  government,  to  supply 
the  deficiency  in  value,  was  obliged  to  double  the 
issue,  and  the  repletion  contributed,  with  the  dis 
trust,  to  depreciate  them.  The  notes  of  the  Bank 
of  England,  based  upon  merchandise  which  might 
depreciate,  and  upon  engagements  of  the  govern- 


COMPARISON    CONTINUED.  213 

ment,  which  the  victories  of  France  caused  to 
dimmish  in  value,  suffered  a  decline,  but  compara 
tively  a  moderate  one,  because  only  one  part  of  the 
property  pledged  was  destructible. 

In  the  three  cases,  the  authorities  wishing  to 
compel  confidence,  met  with  a  failure  proportioned 
to  the  doubtful  value  of  the  securities,  the  reality  of 
which  it  attempted  to  establish  by  violent  measures. 

Law  fixed  the  value  of  the  shares  in  notes,  and 
attempted  to  fix  the  value  of  the  notes  themselves, 
by  rendering  the  acceptance  of  them  compulsory  at 
a  determined  rate. 

The  revolutionary  French  government  gave  a 
forced  currency  to  the  assignats,  and  punished  with 
death  those  who  refused  to  take  them  at  their 
nominal  value. 

The  Bank  of  England  was  authorized  to  refuse  to 
pay  its  notes  at  sight. 

The  result  of  these  different  measures  was  a 
deplorable  disturbance  in  every  kind  of  exchange. 
All  those  making  bargains  would  not  accept  the 
depreciated  money  at  its  nominal  rate,  and  de 
manded  double  or  triple  price,  according  to  the 
degree  of  depreciation ;  but  those  who  were  obliged 
to  accept  payment  on  a  previous  bargain — in  a 
word,  all  creditors — were  ruined,  because  they  were 
obliged  to  accept  a  value  purely  nominal. 


214:  MEMOIR   OF    JOHN   LAW. 

In  proportion  as  the  resistance  to  the  oppression 
increased,  the  authorities  became  more  tyrannical, 
because  they  invaded  domestic  life.  Law  forbade 
the  possession  of  more  than  five  hundred  francs  in 
coin,  and  authorized  informations.  The  revolution 
ary  government,  more  violent  and  extreme  in 
everything,  established  a  maximum  and  regulated 
the  rate  of  all  exchanges,  but  succeeded  no  better. 
The  Bank  of  England,  more  moderate,  because  the 
values  which  it  proclaimed  as  certain  were  nearer 
the  true  standard,  threw  itself  upon  the  patriotism 
of  the  London  merchants,  who  assembled  and  de 
clared  that  they  would  receive  the  notes  in  pay 
ments.  The  notes  continued  to  circulate  at  a 
moderate  discount. 

But  forced  measures  cannot  prevent  the  fall  of 
what  must  inevitably  perish.  The  eight  or  ten  bil 
lions  of  Law  did  not  fall  below  what  they  were  really 
worth.  The  assignats,  issued  beyond  all  proportion 
to  the  property  which  they  represented,  became 
utterly  worthless.  The  Bank  of  England  notes  de 
clined  twelve  and  fifteen  per  cent.,  and  rose  again 
after  the  general  peace,  when  specie  payment  was 
resumed,  but  they  would  have  succumbed  if  Napo 
leon  had  employed  the  infallible  aid  of  time  against 
the  English  policy. 

Certain  general  truths  appear  from  these  facts. 


FORCED   CREDIT.  215 

Credit  ought  to  represent  positive  values,  and 
should  be  at  most  a  very  limited  anticipation  of 
these  values. 

As  soon  as  values  become  uncertain,  force  can 
accomplish  nothing  to  sustain  them. 

Forced  values  are  refused  by  all  who  are  at 
liberty  to  refuse  them,  and  ruin  those  who,  by  pre 
vious  contracts,  cannot  refuse  them. 

Thus  falsehood,  oppression,  spoliation,  destruc 
tion  of  all  fortunes,  these  are  the  ordinary  result  of 
a  false  credit  soon  followed  by  a  forced  credit.  The 
least  deplorable  of  these  experiences,  which  caused 
but  a  momentary  embarrassment,  that  of  the  Bank 
of  England,  owed  its  safety  to  a  successful  battle. 
The  entire  wealth  of  a  country  should  never  depend 
upon  the  deceitful  favors  of  fortune. 

Law,  unhappy  man,  after  having  made  Europe 
resound  with  the  name  of  himself  and  of  his  sys 
tem,  travelled  through  different  countries,  and  at 
last  took  up  his  residence  at  Yenice.  Notwith 
standing  the  capital  which  he  had  taken  to  France 
and  that  which  he  had  left  there,  he  ended  his  life 
in  poverty. 

Continuing  in  correspondence  with  the  Duke  of 
Orleans,  and  afterward  with  the  Duke  of  Bourbon, 
he  never  ceased  to  claim  that  which  the  French 
government  had  the  injustice  to  refuse  him.  He 


216  MEMOIR   OF   JOHN   LAW. 

wrote  to  the  Duke  of  Bourbon,  "  ^Esop  was  a  model 
of  disinterestedness,  however,  the  courtiers  accused 
him  of  keeping  treasure  in  a  trunk  which  he  visited 
often  ;  they  found  there  only  the  garment  which  he 
possessed  before  he  became  a  favorite  of  the  prince. 
If  I  had  saved  my  garment,  I  would  not  change 
condition  with  those  employed  in  the  highest 
places ;  but  I  am  naked ;  they  require  that  I  shall 
subsist,  without  having  any  property  to  maintain 
me,  and  that  I  shall  pay  my  debts  when  I  have  no 
money."  Law  could  not  obtain  the  old  garment 
which  he  demanded.  A  few  years  after  his  depar 
ture  from  France,  in  1729,  he  died  at  Venice, 
destitute,  miserable  and  forgotten. 


NOTES    TO    CHAPTEE   X. 


LAW'S   CHARACTER CIRCUMSTANCES   IN   HIS   CAREER. 


(1.)  HE  proceeded  to  Venice,  where  he  remained 

for  some  months,  the  object  of  the  greatest  curiosity 

to  the  people,  who  believed  him  to  be  the  possessor 

of  enormous  wealth.     No  opinion,  however,  could 

be  more  erroneous.     With  more  generosity  than 

could  have  been  expected  from  a  man  who,  during 

the  greatest  part  of  his  life,  had  been  a  professed 

gambler,    he    refused    to    enrich    himself   at  the 

expense  of  a  ruined  nation.     During  the  height  of 

the  popular  frenzy  for  Mississippi  stock,  he  had 

never  doubted  of  the  final  success  of  his  projects, 

in  making  France  the  richest  and  most  powerful 

nation  in  Europe.      He  invested  all  his  gains  in 

the  purchase  of  landed  property  in  France — a  sure 

proof  of  his   own   belief    in   the   stability   of  his 

schemes.     He  had  hoarded,  no  plate  or  jewelry,  and 

sent  no  money,  like  the  dishonest  jobbers,  to  foreign 

countries.      His    all,   with   the   exception   of    one 

diamond,  worth  about  five  or  six  thousand  pounds 

10  21T 


318  MEMOIR   OF  JOHN   LAW. 

sterling,  was  invested  in  the  French  soil ;  and  when 
he  left  that  country,  he  left  it  almost  a  beggar.  This 
fact  alone  ought  to  rescue  his  memory  from  the 
charge  of  knavery,  so  often  and  so  unjustly  brought 
against  him. — MACKAY. 

(2.)  The  scandal  of  the  time  accused  the  regent 
of  having  absorbed  the  money  of  the  kingdom  to 
promote  his  own  ambitious  views,  and  it  is  certain 
that  he  died  seven  millions  in  debt.  Law  Was 
accused  of  having  transferred  property  from  France 
to  foreign  countries  on  his  private  account.  He 
lived  some  time  in  London  on  the  liberality  of  the 
Marquis  of  Lassay,  and  died  in  Yenice  in  1729,  in 
a  condition  but  little  removed  from  indigence.  I 
saw  his  widow  at  Brussels  as  humble  as  she  had 
been  proud  and  triumphant  at  Paris.  Such  revolu 
tions  are  not  the  least  useful  subjects  of  history. — 
VOLTAIRE, 

(3.)  It  was  imagined  in  France  that  he  had  car 
ried  away  with  him  a  large  treasure.  Dubois,  who 
had  become  his  enemy,  sent  a  certain  Abbe  La 
Riviere  with  instructions  .to  watch  the  slightest 
movements  of  the  ex-Comptroller  of  the  Finances. 
The  spy  could  discover  nothing  unfavorable  to  him. 
The  fact  is,  that  Law  resumed  the  old  occupation 


NOTES.  219 

to  which  he  owed  his  first  wealth,  and  lived  by 
gaming,  which  was  not  discreditable  at  Yenice.  — 
COCHUT. 


He  was  so  little  attached  to  his  property, 
that  he  offered  it  for  distribution  among  those  who 
had  lost  by  his  operations,  and  only  wished  to  retain 
an  income  of  30,000  francs.  This  offer  was  ad 
mired  and  rejected,  because  people  had  less  desire 
to  aid  the  unfortunate  than  to  destroy  him.  — 
COCHUT. 

(5.)  Lady  Law  would  not  quit  Paris  until  she 
had  paid  all  the  tradesmen's  bills  which  the  family 
owed.  —  WOOD. 

(6.)  "When  Law  was  at  the  height  of  his  power 
he  showed  most  the  qualities  of  a  good  minister. 
He  abolished  vexatious  taxes,  modified  the  tariff 
and  the  excise  on  articles  where  it  was  most 
burdensome  to  the  people,  recalled,  by  the  en 
couragements  offered  by  government,  many  French 
men  who  had  been  forced  to  expatriate  themselves, 
liberated  prisoners  for  d.bt,  communicated  to  in 
dustry  almost  too  great  activity,  undertook  public 
works  of  great  utility,  reclaimed  lands,  took  mea 
sures  to  relieve  the  poor  —  all  this  while  the  system 


MEMOIR   OF  JOHN   LAW. 

was  in  greatest  vogue,  and  he  was  most  caressed 
and  flattered. 

Another  real  benefit,  proceeding  from  the  same 
inspirations,  was  the  establishment  of  gratuitous 
instruction  in  the  University  of  Paris.  The  Parisians 
were  so  touched  by  this  liberality  that  they  wished 
to  celebrate  it  by  a  grand  procession,  in  which  all 
classes  should  be  represented,  even  to  the  most 
humble  artisan.  These  generous  efforts,  coincident 
with  the  first  successes  of  the  system,  explain  the 
infatuation  of  the  nation,  and  justify  its  enthusiasm 
of  a  moment  for  the  strange  and  powerful  man  who 
had  produced  so  many  phenomena. — COCHUT. 

(7.)  He  wrote,  "  I  do  not  assume  to  myself  any 
merit  from  this  conduct,  and  I  never  so  much  as 
spoke  upon  the  subject  to  the  regent.  But  I  can 
not  help  observing,  that  this  mode  of  behavior  is 
diametrically  opposite  to  the  idea  my  enemies  wish 
to  impress  to  me ;  and  surely  all  Europe  ought  to 
have  good  opinion  of  my  disinterestedness,  and  of 
the  condition  to  which  I  am  reduced,  since  I  no 
longer  receive  any  proposals  of  marriage  for  my 
children.  My  lord,  I  conducted  myself  with  a  still 
greater  degree  of  delicacy,  for  I  took  care  not  to 
have  my  son  or  my  daughter  married  even  in 
France,  although  I  had  the  most  splendid  and 


NOTES.  221 

advantageous  offers  of  that  kind.  I  did  not  choose 
that  any  part  of  ray  protection  should  be  owing  to 
alliance,  but  that  it  should  depend  solely  upon  the 
intrinsic  merits  of  my  project." — WOOD. 

(8.)  To  his  moral  character  no  compliments  can 
be  paid.  His  uncommon  personal  endowments 
generally  insured  him  success  in  affairs  of  gallantry, 
and  to  these  unworthy  pursuits  he  devoted  too  much 
of  his  time.  Lockhart  Carnwath  relates  that  even 
before  he  left  Scotland,  he  was  "  nicely  expert  in 
all  manner  of  debaucherie."  It  is  said  that  he  lived 
several  years  in  a  course  of  adultery  with  an  English 
lady,  whom  he  had  persuaded  to  elope  from  her 
husband,  and  to  accompany  him  in  his  rambles 
abroad ;  and  the  Due  de  Eichelieu  speaks  in  very  f 
plain  terms  of  the  attachment  the  Duchess  Dowager  ^ 
of  Orleans  had  for  Mr.  Law.  The  excess  to  which 
he  carried  the  destructive  vice  of  gambling  has. 
been  already  noticed. 

Mr.  Law  married  Lady  Catharine  Knollys,  third 
daughter  of  Nicholas  third  Earl  of  Banbury,  by  his 
second  wife  Anne,  daughter  of  William  Lord  She- 
rard.  Lady  Catherine,  who  was  first  married  to  a 
gentleman  of  the  name  of  Lenor,  by  whom  it  does 
not  appear  she  had  any  issue,  was  born  1669,  and 
died  1747,  according  to  the  following  pedigree, 


222  MEMOIR  OF  JOHN  LAW. 

communicated  by  the  late  Earl  of  Wiltshire  and 
Banbur y : 

Thomas  Boleyn,  Earl  of  Wiltshire  and  Ormond. 


Lady  Anne  Boleyn,  Lady  Mary  Boleyn, 

married  to  King  Henry  VIII.  married  to  William  Carey. 

Elizabeth,  Queen  of  England.  Catherine  Carey,  married  to 

Sir  Francis  Knollys,  K.  G. 

William,  Earl  of  Banbury. 
Nicholas,  Earl  of  Banbury. 

Lady  Catherine  Knollys, 
born  1669,  died  1747. 
—WOOD. 

(9.)  Dying,  he  left  only  a  few  pictures,  and  the 
ring  worth  10,000  (ante,  NOTE  1)  francs,  which  he 
used  to  pawn  when  the  fortune  of  the  gaming-table 
was  unfavorable  to  him. 

After  his  departure,  the  following  genealogy  of 
the  System  was  posted  on  the  walls  of  the  streets  of 
Paris:  Belzebub  begat  Law — Law  begat  Missis 
sippi — Mississippi  begat  the  System — the  System 
begat  Paper — Paper  begat  the  Bank — the  Bank  be 
gat  Bank-notes — Bank-notes  begat  Shares — Shares 
begat  Stockbrokerage — Stockbrokerage  begat  the 
Register — the  Register  begat  the  Account — the  Ac 
count  begat  the  general  Schedule — the  Schedule 
begat  Zero — from  whom  all  power  of  reproduction 
was  taken  away. — COOHUT. 


NOTES.  223 

(10.)  Assignat  was  the  name  given  to  a  peculiar 
species  of  paper  money  issued  during  the  first 
French  revolution.  The  influence  of  the  system, 
operating  along  with  the  other  attempts  to  regulate 
trade,  forms  a  prominent  feature  in  the  calamitous 
history  of  the  epoch.  The  share  borne  in  it  by  the 
assignats  is  at  the  same  time  a  memorable  instance, 
for  the  use  of  the  economist  and  financier,  of  the 
hopelessness  of  projects  for  creating  or  preserving 
national  wealth  by  an  issue  of  paper  money,  not  the 
representative  of  available  wealth  and  real  business 
transactions.  The  first  issue  of  assignats  was  made 
in  the  security  of  the  forfeited  ecclesiastical  pro 
perty,  and  was  adopted  as  a  preferable  alternative 
to  throwing  the  forfeited  lands  on  the  market, 
which  it  was  no  doubt  judiciously  believed  that  so 
large  an  amount  of  property  would  glut.  The 
holder  of  the  assignats  might  use  them  as  money  or 
claim  the  land  which  they  represented.  As  more 
forfeitures  occurred,  the  issue  of  assignats  increased. 
But  it  soon  ceased  to  be  measured  by  property  and 
was  enlarged  according  to  the  exigencies  of  the 
revolutionary  government.  The  paper  money  fell 
to  half,  then  to  a  sixth  part  of  the  value  of  the  same 
denomination  in  silver,  and  sinking  rapidly  through 
successive  grades  of  decrease,  silver  held  at  last  the 
value  of  one  hundred  and  fifty  times  its  denomina 
tion  in  paper.  In  August  of  1793,  3,776  millions 
of  francs  were  thus  put  in  circulation ;  and  virtu 
ally,  the  assignats  became  worthless. 


224  MEMOIR   OF   JOHN   LAW. 

(11.)  "  The  cupidity  which  it  (speculation)  ex 
cited  among  all  classes  of  people,  from  the  very 
lowest  up  to  magistrates,  bishops,  and  even  princes, 
distracted  all  attention  from  public  affairs,  and  all 
minds  from  political  ambitious  schemes,  by  filling 
them  with  the  fear  of  losing  and  avidity  of  gain. 
It  was  a  new  and  prodigious  game  in  which  all  citi 
zens  bet,  one  against  another.  Desperate  gamblers 
will  not  quit  their  cards  to  annoy  the  government. 
It  happened,  from  a  series  of  causes  perceptible  only 
to  the  most  experienced  and  most  sagacious  under 
standing,  that  a  system  entirely  chimerical  created 
a  real  commerce  and  revived  the  Indian  Company, 
formerly  established  by  the  celebrated  Colbert,  and 
ruined  by  the  wars.  In  fine,  although  there  were 
many  private  fortunes  ruined,  the  nation  soon  be 
came  more  commercial  and  more  rich.  This  system 
quickened  the  intelligence  as  civil  war  arouses  the 
courage  of  a  nation. 

"  The  fury  for  speculation  was  an  epidemic  dis 
order  which  spread  into  Holland  and  England.  It 
merits  the  attention  of  posterity,  for  it  was  not  the 
political  interests  of  two  or  three  princes  which  dis 
tracted  nations.  The  people  precipitated  themselves 
into  this  folly,  which  enriched  a  few  families  and 
which  reduced  so  many  others  to  beggary." 


NOTES. 


225 


Historians  are  divided  in  opinion  as  to  whether 
they  should  designate  Law  as  a  knave  or  a  madman. 
Both  epithets  were  unsparingly  applied  to  him  in 
his  lifetime,  and  while  the  unhappy  consequences 
of  his  projects  were  still  deeply  felt.  Posterity, 
however,  has  found  reason  to  doubt  the  justice  of 
the  accusation,  and  to  confess  that  John  Law  was 
neither  knave  nor  madman,  but  one  more  deceived 
than  deceiving,  mo're  sinned  against  than  sinning. 
He  was  thoroughly  acquainted  with  the  philosophy 
and  true  principles  of  credit.  He  understood  the 
monetary  question  better  than  any  man  of  his  day  ; 
and  if  his  system  fell  with  a  crash  so  tremendous, 
it  was  not  so  much  his  fault  as  that  of  the  people 
amongst  whom  he  had  erected  it.  He  did  not  cal 
culate  upon  the  avaricious  frenzy  of  a  whole  nation ; 
he  did  not  see  that  confidence,  like  mistrust,  could 
be  increased  almost  ad  injmitum,  and  that  hope  was 
as  extravagant  as  fear.  How  was  he  to  foretell  that 
the  French  people,  like  the  man  in  the  fable,  would 
kill,  in  their  frantic  eagerness,  the  fine  goose  he  had 
brought  to  lay  them  so  many  golden  eggs  ?  His 
fate  was  like  that  which  may  be  supposed  to  have 
overtaken  the  first  adventurous  boatman  who  rowed 
from  Erie  to  Ontario.  Broad  and  smooth  was  the 
river  on  which  he  embarked ;  rapid  and  pleasant 

was  his  progress ;  and  who  was  to  stay  him  in  his 

lo* 


226  MEMOIR   OF   JOHN   LAW. 

career  ?  Alas,  for  him !  the  cataract  was  nigh. 
He  saw,  when  it  was  too  late,  that  the  tide  which 
wafted  him  so  joyously  along  was  the  tide  of  de 
struction  ;  and  when  he  endeavored  to  retrace  his 
way,  he  found  that  the  current  was  too  strong  for 
his  weak  efforts  to  stem,  and  that  he  drew  nearer, 
every  instant,  to  the  tremendous  falls.  Down  he 
went  over  the  sharp  rocks,  and  the  waters  with  him. 
He  was  dashed  to  pieces  with  his  bark;  but  the 
waters,  maddened  and  turned  to  foam  by  the  rough 
descent,  only  boiled  and  bubbled  for  a  time,  and 
then  flowed  on  again  as  smoothly  as  ever.  Just  so 
it  was  with  Law  and  the  French  people.  He  was 
the  boatman,  and  they  were  the  waters. 


THE    DARIEN    EXPEDITION 


PREFACE 

TO 

THE     DARIEN     EXPEDITION 

AND 

SOUTH    SEA    SCHEME. 


IT  seems  to  us  appropriate,  to  add  to  the  history  of  the  Missis 
sippi  Bubble,  brief  accounts  of  the  Darien  Expedition  and  the  South 
Sea  scheme,  which  were  nearly  contemporaneous  with  it,  resembled 
it  in  many  particulars  of  their  progress,  and  afford  a  similar  illustra 
tion  of  the  speculative  fury  which,  at  that  epoch,  in  their  respective 
countries,  intoxicated  all  classes  alike,  noble  and  humble,  rich  and 
poor,  learned  and  ignorant. 

They  are  unique  in  history  for  the  magnitude  and  extent  of  their 
enterprise,  for  the  effect  they  produced  upon  the  manners  and 
habits  of  the  people,  and  for  the  wide-spread  ruin  in  which  they 
terminated ;  a  result  immediately  disastrous  to  a  prodigious  num 
ber  of  individuals,  but  ultimately  beneficial  to  the  nation.  Specula 
tion  has  never,  before  or  since,  led  people  into  such  violent 
excesses,  or  brought  ruin  to  such  a  number  of  persons  of  all  ages, 
sexes  and  conditions ;  yet  the  same  spirit  pervades  all  countries 
and  all  times.  The  experience  of  the  last  thirty  years  in  our  own 
country,  with  its  numerous  crises,  affords  ample  evidence  of  its  pre 
sence  here,  and  we  hope  that  a  history  of  its  most  remarkable 
manifestations  in  other  countries  may  be  found  interesting  and 
suggestive. 


230  INTRODUCTION. 

The  account  of -the  Darien  Expedition  is  taken  from  the  "  Encyclo 
paidia  Britannica,"  and  is  the  most  complete  and  authentic  which 
has  yet  been  published.  The  history  of  the  South  Sea  scheme  is 
taken  from  Mackay's  "Memoirs  of  Extraordinary  Popular 
Delusions,"  which  contains,  also,  a  list  of  the  numerous  absurd  and 
monstrous  projects  which  were  eagerly  embraced  during  the 
delirium  of  that  financial  fever. 


THE  DARIEN  EXPEDITION. 


OF  the  rise,  progress,  and  catastrophe  of  this 
ill-fated  undertaking,  Sir  John  Dalrymple,  in  the 
second  volume  of  his  Memoirs  of  Great  Britain 
and  Ireland,  has  given  a  very  interesting  account, 
authenticated  in  every  particular  by  unquestion 
able  documents.  The  projector  and  leader  of  the 
Darien  Expedition  was  a  clergyman  of  the  name 
of  Paterson,  who,  having  a  strong  desire  to  see 
foreign  countries,  made  his  profession  the  means 
of  indulging  it,  by  going  to  the  western  world  on 
the  pretence  of  converting  the  Indians  to  the  reli 
gion  of  the  old.  During  his  residence  there,  he 
became  acquainted  with  Captain  Dampier  and  Mr. 
Wafer,  who  afterward  published,  the  one  his  voy 
ages,  the  other  his  travels  in  the  region  where  the 
separation  is  narrowest  between  the  Atlantic  and 
the  Pacific  oceans ;  and  both  of  whom  appear  to 


THE    DAKIEN    EXPEDITION. 

have  been  men  of  considerable  observation.  But 
he  obtained  much  more  knowledge  from  men  who 
could  neither .  read  nor  write,  by  cultivating  the 
acquaintance  of  some  of  the  old  buccaneers,  who? 
after  surviving  their  glories  and  their  crimes,  still, 
in  the  extremity  of  age  and  misfortune,  recounted 
with  transport  the  ease  with  which  they  had 
passed  and  repassed  from  one  sea  to  the  other, 
sometimes  in  hundreds  together,  and  driving  strings 
of  mules  before  them  loaded  with  the  plunder  of 
friends  and  of  foes.  Paterson  having  examined 
the  places,  satisfied  himself  that  on  the  Isthmus 
of  Darien  there  was  a  tract  of  country  running 
across  from  the  Atlantic  to  the  Pacific,  which  the 
Spaniards  had  never  possessed,  and  inhabited  by  a 
people  continually  at  war  with  them;  that  along 
the  coast,  on  the  Atlantic  side,  there  lay  a  string  of 
islands  called  the  Sambaloes,  uninhabited,  and  full 
of  natural  strength  and  of  forests,  from  wrhich  last 
circumstance,  one  of  them  was  called  the  island  of 
the  pines;  that  the  seas  there  were  filled  witlT 
turtle  and  the  manati  or  sea  cow ;  that  midway 
between  Porto-Bello  and  Carthagena,  but  nearly 
fifty  leagues  distant  from  either,  at  a  place  called 
Acta,  in  the  mouth  of  the  Darien,  there  was  a 
natural  harbor,  capable  of  receiving  the  greatest 
fleets,  and  defended  from  storms  by  other  islands 


THE   DAEIEN   EXPEDITION.  233 

which  covered  the  mouth  of  it,  and  from,  enemies, 
by  a  promontory  which  commanded  the  passage, 
and  by  hidden  rocks  in  the  passage  itself;  that,  on 
the  other  side  of  the  isthmus,  and  in  the  same  tract 
of  country,  there  were  natural  harbors,  equally 
capacious  and  well  defended ;  that  the  two  oceans 
were  connected  by  a  ridge  of  hills,  which,  by  their 
height,  created  a  temperate  climate  in  the  midst  of 
the  most  sultry  latitudes,  and  were  sheltered  by 
forests,  but  not  rendered  damp,  because  the  trees 
grew  at  a  distance  from  each  other,  and  had  very 
little  underwood ;  that,  contrary  to  the  usual  barren 
nature  of  hilly  countries,  the  soil  was  of  a  black 
mold,  two  or  three  feet  deep,  and  producing  spon 
taneously  the  fine  tropical  fruits  and  plants,  roots 
and  herbs ;  that  roads  might  be  formed  with  ease 
along  the  ridge,  by  which  mules,  and  even  car 
riages,  might  pass  from  one  sea  to  the  other  in  the 
space  of  a  day  ;  and  consequently,  that  this  passage 
seemed  to  be  pointed  out  by  nature  as  a  common 
centre  to  connect  together  the  trade  and  intercourse 
of  the  universe. 

Paterson  knew  that  ships  which  stretch  in  a 
straight  line  from  one  point  to  another,  and  with 
one  wind,  run  less  risks  \nd  require  fewer  hands, 
than  ships  which  pass  through  many  latitudes, 
follow  the  windings  of  many  coasts,  and  require 


234:  THE   DAEIEN   EXPEDITION. 

many  winds ;  that  vessels  of  seven  or  eight  hundred 
tons  burden  are  often  to  be  met  in  the  South  Sea, 
navigated  by  not  more  than  eight  or  ten  hands, 
because  these  hands  have  little  else  to  do  than  set 
their  sails  when  they  begin  their  voyage,  and  to 
take  them  in  when  they  end  it;  that  as  soon  as 
ships  from  Britain  should  get  so  far  south  as  to 
reach  the  trade-wind,  which  seldom  varies,  that 
wind  would  carry  them  to  Darien,  and  the  same 
wind  would  carry  ships  from  the  Bay  of  Panama, 
on  the  opposite  side  of  the  isthmus,  to  the  East 
Indies;  that  as  soon  as  ships  coming  from  the  East 
Indies  to  the  Bay  of  Panama  got  so  far  north  as 
the  latitude  of  40°,  to  reach  the  westerly  winds, 
which  about  that  latitude  blow  almost  as  regularly 
from  the  west  as  the  trade-winds  do  from  the  east, 
these  winds  would  carry  them  in  the  track  of  the 
Spanish  Acapulco  ships  to  the  coast  of  Mexico, 
whence  the  land-wind,  which  blows  forever  from 
the  north  to  the  south,  would  carry  them  along  the 
coast  of  Mexico  into  the  Bay  of  Panama.  Thus, 
in  going  from  Britain,  ships  would  encounter 
no  uncertain  winds  except  during  their  passage 
south  into  the  latitude  of  the  trade- wind;  and  in 
coming  from  India  to  the  Bay  of  Panama  they 
would  meet  no  uncertain  winds,  except  in  their 
passage  north  to  the  latitude  of  the  westerly  winds, 


THE    DAKIEN    EXPEDITION.  235 

and  in  going  from  the  other  side  of  the  isthmus  to 
the  east,  with  no  uncertain  wind  whatsoever.  Gold 
was  seen  by  Paterson  in  some  places  on  the  isthmus ; 
and  hence,  an  island  on  the  Atlantic  side  was  called 
the  Gold  Island,  and  a  river  on  the  side  running  to 
the  Pacific  was  called  the  Golden  Elver;  but  these 
were  objects  which  he  regarded  not  at  that  time, 
because  far  greater  were  in  his  eye,  namely,  the 
shortening  of  distances,  the  drawing  of  nations 
nearer  to  each  other,  the  preservation  of  the  valu 
able  lives  of  seamen,  and  the  saving  in  freight  and 
in  time,  so  important  to  merchants,  and  to  an 
animal  whose  life  is  of  so  short  duration  as  that  of 
man. — (NOTE  1.) 

By  this  obscure  Scotchman  a  project  was  formed 
to  settle,  on  this  neglected  spot,  a  great  and  power 
ful  colony ;  not  as  other  colonies  have,  for  the  most 
part,  been  settled,  by  chance,  and  unprotected  by 
the  country  whence  they  proceeded ;  but  by  system, 
upon  foresight,  and  to  receive  the  ample  protection 
of  those  governments  to  whom  he  was  to  offer  his 
project.  And  certainly  no  greater  idea  has  been 
formed  since  the  time  of  Columbus. 

Paterson's  original  intention  was  to  submit  his 
project  to  England,  as  the  country  which  had  most 
interest  in  it,  not  only  from  the  benefit  common  to  all 
nations,  of  shortening  the  length  of  voyages  to  the 


236  THE   DABIEN   EXPEDITION. 

East  Indies,  but  by  the  effect  which  it  would  have 
had  in  connecting  the  interest  of  her  European,  West 
Indian,  American,  African,  and  East  Indian  trade. 
Paterson,  however,  having  few  acquaintances,  and 
no  protection  in  London,  thought  of  drawing  the 
public  eye  upon  him,  and  ingratiating  himself  with 
moneyed  men  and  with  great  men,  by  assisting  them 
to  model  a  project,  which  was  at  that  time  in  embryo, 
for  erecting  the  Bank  of  England.  But  that  hap 
pened  to  him  which  has  happened  to  many  project 
ors  in  his  situation ;  the  persons  to  whom  he  applied, 
made  use  of  his  ideas,  took  the  credit  of  them  to 
themselves,  were  civil  to  him  for  a  while,  and 
neglected  him  afterward.  He  therefore  communi 
cated  his  project  of  a  colony  only  to  a  few  persons 
in  London,  and  these  few  discouraged  him. 

He  next  submitted  his  project  to  the  Dutch,  the 
Hamburgers,  and  the  Elector  of  Brandenburg; 
because,  by  means  of  the  passage  of  the  Ehine  and 
Elbe  through  their  states,  he  thought  that  the  great 
additional  quantities  of  East  Indian  and  American 
goods  which  his  colony  would  export  to  Europe 
would  be  distributed  throughout  Germany.  The 
Dutch  and  Hamburg  merchants,  although  they  had 
most  interest  in  the  project,  heard  him  with  indiffer 
ence ;  while  the  elector,  who  had  very  little  inte 
rest  in  it,  received  him  with  honor  and  kindness ; 


THE   DAEIEN   EXPEDITION.  237 

but  court  arts  and  false  reports  soon  lost  him  even 
that  prince's  favor.  Paterson,  on  his  return  to 
London,  formed  a  friendship  with  Mr.  Fletcher,  of 
Saltown,  whose  mind  was  inflamed  with  the  love 
of  public  good,  and  all  whose  ideas  to  procure  it 
had  a  sublimity  about  them.  Fletcher  brought 
Paterson  down  to  Scotland,  presented  him  to  the 
Marquis  of  Tweeddale,  then  minister  for  that 
country ;  and  thereafter,  with  that  power  which  a 
vehement  spirit  always  possesses  over  a  diffident 
one,  persuaded  the  marquis,  by  arguments  of 
public  good  and  the  honor  which  would  redound  to 
his  administration,  to  adopt  the  project.  Lord 
Stair  and  Mr.  Johnston,  the  two  secretaries  of 
state,  patronized  those  abilities  in  Paterson  which 
they  possessed  in  themselves ;  and  the  lord  advo 
cate,  Sir  James  Stuart,  the  same  person  who  had 
adjusted  the  Prince  of  Orange's  declaration  at  the 
revolution,  and  whose  son  had  married  a  niece 
of  Lord  Stair,  went  naturally  along  with  his  con 
nections.  These  persons,  in  June,  1695,  procured 
a  statute  from  parliament,  and  afterward  a  charter 
from  the  crown  in  terms  thereof,  "  for  creating  a 
trading  company  to  Africa  and  the  New  World, 
with  power  to  plant  colonies  and  build  forts,  by 
consent  of  the  inhabitants,  in  places  not  possessed 
by  other  European  nations." 


238  THE  DAKIEN   EXPEDITION. 

Peterson,  now  finding  the  ground  firm  under  him, 
and  that  he  was  supported  by  almost  all  the  power 
and  talents  of  his  country,  the  character  of  Flet 
cher,  and  the  sanction  of  an  act  of  parliament  and 
royal  charter,  threw  his  project  boldly  before  the 
public,  and  opened  a  subscription  for  a  company. 
The  frenzy  of  the  Scotch  nation  to  sign  the  Solemn 
League  and  Covenant  never  exceeded  the  rapidity 
with  which  they  ran  to  subscribe  to  the  Darien 
Company.  The  nobility,  the  gentry,  the  merchants, 
the  people,  the  royal  burghs,  without  the  exception 
of  one,  and  most  of  the  other  public  bodies,  sub 
scribed.  Young  women  threw  their  little  fortunes 
into  the  stock ;  and  widows  sold  their  jointures  to 
get  the  command  of  money  for  the  same  purpose. 
Almost  immediately  £400,000  were  subscribed  in 
Scotland,  although  there  was  not  at  that  time  above 
£800,000  of  cash  in  the  kingdom.  The  famous 
Mr.  Law,  then  a  youth,  afterward  confessed  that 
the  facility  with  which  he  saw  the  passion  of  specu 
lation  communicate  itself,  satisfied  him  of  the  pos 
sibility  of  producing  the  same  effect  by  means  of 
the  same  cause,  but  upon  a  larger  scale,  when  the 
Duke  of  Orleans  engaged  him  against  his  will  to 
turn  his  bank  into  a  bubble.  Paterson's  project, 
which  had  been  received  by  strangers  with  fears 
when  opened  to  them  in  private,  filled  them  with 


THE   DARIEN    EXPEDITION.  239 

hopes  when  it  came  to  them  upon  the  wings  of 
public  fame ;  for  Colonel  Erskine,  son  of  Lord  Card- 
rose,  and  Mr.  Heldane  of  Gleneaghs,  the  one  a 
generous  branch  of  a  generous  stem,  and  the  other 
a  country  gentleman  of  fortune  and  character, 
having  been  deputed  to  receive  subscriptions  in 
England  and  on  the  continent,  the  English  sub 
scribed  £300,000,  and  the  Dutch  and  Hamburgers 
£200,000.— (NOTE  2.) 

In  the  meantime,  the  jealousy  of  trade,  which 
lias  done  more  mischief  to  the  commerce  of  England 
than  all  other  causes  put  together,  created  an  alarm 
in  England ;  and  the  Houses  of  Lords  and  Com 
mons,  without  previous  inquiry  or  reflection,  on  the 
13th  of  December,  1695,  concurred  in  a  joint 
address  to  the  king  against  the  establishment  of  the 
Darien  Company,  as  detrimental  to  the  interest  of 
the  East  India  Company.  Soon  afterward  the 
Commons  impeached  some  of  their  own  country 
men  for  being  instrumental  in  erecting  the  com 
pany,  and  also  some  of  the  Scotch  nation,  one  of 
whom  was  Lord  Belhaven ;  that  is  to  say,  they 
arraigned  the  subjects  of  another  country  for 
making  use  of  their  own  laws.  Among  six  hun 
dred  legislators,  not  one  had  the  sense,  not  to  say 
genius,  to  propose  a  committee  of  both  parliaments 
to  inquire  into  the  principles  and  consequences  of 


24:0  THE   DAKIEN    EXPEDITION. 

the  establishment;  and  if  these  should,  upon 
inquiry,  be  found  sound  and  beneficial,  that  the 
advantage  should  be  communicated,  by  a  participa 
tion  of  rights,  to  both  nations.  The  king's  answer 
was,  that  he  had  been  ill-advised  in  Scotland.  He 
soon  afterward  changed  his  Scottish  ministers,  and 
sent  orders  to  his  residents  at  Hamburg  to  present 
a  memorial  to  the  senate,  in  which  he  disowned  the 
company,  and  warned  them  against  all  connections 
with  it.  The  senate  transmitted  the  memorial  to 
the  assembly  of  merchants,  who  returned  it  with  the 
following  spirited  answer :  "  We  look  t.  pon  it  as  a 
very  strange  thing,  that  the  king  of  Britain  should 
oifer  to  hinder  us,  who  are  a  free  people,  to  trade  with 
whom  we  please ;  but  are  amazed  to  think  that  he 
would  hinder  us  from  joining  with  his  own  subjects 
in  Scotland,  to  whom  he  had  lately  given  such  large 
privileges,  by  so  solemn  an  act  of  parliament." 
But  the  merchants,  seeing  the  scheme  discouraged 
by  their  governments,  were  soon  intimidated ;  and 
the  Dutch,  Hamburg,  and  London  merchants  with 
drew  their  subscriptions.— (NOTES  3  and  4.) 

The  Scotch,  not  discouraged,  were  rather  ani 
mated  by  this  oppression ;  for  they  converted  it  into 
a  proof  of  the  envy  of  the  English,  and  of  their  con 
sciousness  of  the  great  advantages  which  were  to 
flow  to  Scotland  from  the  colony.  The  company 
proceeded  to  build  six  ships  in  Holland,  from  thirty- 


THE   DAKIEN   EXPEDITION.  241 

six  to  sixty  guns,  and  they  engaged  1,200  men  for  the 
colony ;  amongst  whom  were  younger  sons  of  many 
of  the  noble  and  ancient  families  of  Scotland  and 
sixty  officers  who  had  been  disbanded  at  the  peace, 
who  carried  with  them  such  of  their  private  men, 
generally  raised  on  their  own  or  the  estates  of  their 
relations,  as  they  knew  to  be  faithful  and  brave, 
most  of  them  being  Highlanders.  The  Scotch  par 
liament,  on  the  5th  of  August,  1698,  unanimously 
addressed  the  king  to  support  the  company.  The 
lord  president,  Sir  Hugh  Dalrymple,  brother  of 
Lord  Stair,  and  head  of  the  bench,  and  the  lord 
advocate  Sir  James  Stuart,  head  of  the  bar,  jointly 
drew  up  memorials  to  the  king,  able  in  point  of 
argument,  information,  and  arrangement,  in  which 
they  defended  the  rights  of  the  company  upon  the 
principles  of  constitutional  and  of  public  law ;  and 
neighboring  nations,  with  a  mixture  of  surprise  and 
respect,  saw  the  poorest  kingdom  of  Europe  send 
ing  forth  the  most  gallant  and  the  most  numerous 
colony  which  had  ever  set  out  from  the  old  to  the 
new  world.  On  the  26th  day  of  July,  1698,  the 
whole  city  of  Edinburgh  poured  down  to  Leith  to 
see  the  colony  depart,  amidst  the  tears,  and  prayers, 
and  praises  of  relations,  and  friends  and  country 
men.  Many  seamen  and  soldiers,  whose  services 
had  been  refused,  because  more  had  offered  them- 

11 


242  THE   DAKIEN   EXPEDITION. 

selves  than  were  needed,  were  found  hid  in  the 
ships,  and,  when  ordered  ashore,  clung  to  the  ropes 
and  timbers,  imploring  to  go  without  reward  along 
with  their  companions.  Twelve  hundred  men  sailed 
in  five  stout  ships,  and  arrived  at  Darien  in  two 
months,  with  the  loss  of  only  fifteen  of  their  peo 
ple.  At  that  time  it  was  in  their  power,  most  of 
them  being  well  born,  and  all  of  them  hardily  bred 
and  inured  to  the  fatigues  and  dangers  of  the  late 
war,  to  have  marched  from  the  northmost  part  of 
Mexico  to  the  southmost  point  of  Chili,  and  to  have 
overturned  the  whole  empire  of  Spain  in  South 
America.  But,  modest  respecting  their  own  and 
their  country's  character,  and  afraid  of  its  being 
alleged  that  they  had  plunder,  and  not  a  settle 
ment  in  view,  they  began  with  purchasing  lands 
from  the  natives,  and  sending  messages  of  amity  to 
the  Spanish  governors  within  their  reach ;  and  then 
fixed  their  station  at  Acta,  calling  it  New  St. 
Andrew,  from  the  name  of  the  titular  saint  of  Scot 
land,  and  the  country  itself  New  Caledonia.  One 
of  the  sides  of  the  harbor  being  formed  by  a  long 
narrow  neck  of  land  which  ran  into  the  sea,  they 
cut  it  across  so  as  to.  join  the  ocean  and  harbor. 
Within  this  defence  they  erected  their  fort,  planting 
upon,  it  fifty  pieces  of  cannon.  On  the  other  side 
of  the  harbor  there  was  a  mountain  about  a  mile  in 


THE   DARIEN    EXPEDITION.  243 

height,  on  which  they  placed  a  watch-house,  which, 
in  the  rarefied  air  within  the  tropics,  so  favorable 
for  vision,  gave  them  an  immense  range  of  pros 
pect,  in  order  to  prevent  'all  surprise.  To  this 
place  it  was  observed  that  the  Highlanders  often 
repaired  to  enjoy  the  cool  air,  and  to  talk  of  their 
friends  whom  they  had  left  behind  on  their  native 
hills.  The  first  public  act  of  the  colony  was  to 
publish  a  declaration  of  freedom  of  trade  and  reli 
gion  to  all  nations.  This  luminous  idea  originated 
with  Paterson. 

But  the  Dutch  East  India  Company  having 
pressed  the  king,  in  concurrence  with  his  English 
subjects,  to  prevent  the  settlement  at  Darien,  orders 
had  been  sent  from  England  to  the  governors  of 
the  West  Indian  and  American  colonies,  to  issue 
proclamations  against  giving  assistance,  or  even 
holding  correspondence  with  the  colony  ;  and  these 
were  more  or  less  harshly  expressed,  according  to 
the  temper  of  the  different  governors.  The  Scotch, 
trusting  to  far  different  treatment  and  to  the  sup 
plies  which  they  expected  from  these  colonies,  had 
not  brought  sufficient  provisions  along  with  them, 
and  fell  into  diseases  from  bad  or  inadequate  food ; 
but  the  more  generous  savages,  by  hunting  and 
fishing  for  them,  afforded  them  that  relief  which 
fellow  Britons  had  refused.  They  lingered  eight 


244  THE   DARIEN    EXPEDITION. 

months,  waiting  in  vain  for  assistance  from  Scot 
land  and  almost  all  of  them  either  died  out  or 
quitted  the  settlement.  Paterson,  who  had  been 
the  first  to  enter  the  ship  at  Leith,  was  the  last  to  go 
on  board  at  Darien. 

During  the  space  of  two  years,  while  the  estab 
lishment  of  his  colony  had  been  in  agitation,  Spain 
had  made  no  complaint  to  England  or  Scotland 
against  it.  The  Darien  council  even  averred  in 
their  papers,  which  are  in  the  Advocates'  Library, 
that  the  right  of  the  company  was  debated  before 
the  king,  in  presence  of  the  Spanish  ambassador, 
ere  the  colony  left  Scotland.  But  now,  on  the  3d 
of  May,  1698,  the  Spanish  ambassador  at  London 
presented  a  memorial  to  the  king,  in  which  he  com 
plained  of  the  settlement  at  Darien  as  an  encroach 
ment  on  the  rights  of  his  master. — (KOTES  5,  6  and  7.) 

The  Scotch,  ignorant  of  the  misfortunes  of  their 
colony,  but  provoked  at  this  memorial,  soon  after 
ward  sent  out  another  colony  of  1,300  men,  to  sup 
port  an  establishment  which  was  now  no  more  ; 
but  this  last  proved  unlucky  in  its  passage.  One 
of  the  vessels  was  lost  at  sea,  many  men  died  on 
board,  and  the  rest  arrived  at  different  times,  bro 
ken  in  their  health,  and  disappointed  when  they 
heard  the  fate  of  those  who  had  gone  before  them. 
Added  to  the  misfortunes  of  the  first  colony,  the 


THE   DAEIEN  EXPEDITION.  245 

second  had  a  misfortune  peculiar  to  itself.  The 
General  Assembly  of  the  church  of  Scotland  sent 
out  four  ministers,  with  orders  to  take  charge  of  the 
souls  of  the  colony,  and  to  erect  a  presbytery,  with 
a  moderator,  clerk,  and  record  of  proceedings ;  to 
appoint  ruling  elders,  deacons,  overseers  of  the 
manners  of  the  people,  and  assistants  in  the  exer 
cise  of  church  discipline  and  government,  and  to 
hold  regular  kirk-sessions.  When  they  arrived,  the 
officers  and  gentlemen  were  occupied  in  building 
houses  for  themselves  with  their  own  hands,  because 
there  was  no  assistance  to  be  got  from  others  ;  yet 
the  four  ministers  complained  grievously  that  the 
council  did  not  order  houses  to  be  immediately  built 
for  their  accommodation.  They  had  not  had  the 
precaution  to  bring  with  them  letters  of  recom 
mendation  from  the  directors  at  home  to  the  coun 
cil  abroad;  and  on  these  accounts,  not  meeting 
with  all  the  attention  they  expected  from  the  higher, 
they  paid  court  to  the  inferior  ranks  of  the  colo 
nists,  and  by  this  means  sowed  divisions  in  the 
colony.  They  exhausted  the  spirits  of  the  people, 
by  requiring  their  attendance  at  sermon  four  or  five 
hours  at  a  time,  relieving  each  other  by  preaching 
alternately,  but  allowing  no  relief  whatever  to  their 
hearers.  The  employment  of  one  of  the  days  set 
aside  for  religious  exercise,  which  was  Wednesday 


246  THE   DAEIEN   EXPEDITION. 

they  divided  into  three  parts ;  thanksgiving,  humi 
liation,  and  supplication,  in  which  three  ministers 
followed  one  another.  And  as  the  service  of  the 
church  of  Scotland,  consists  of  a  lecture  with  a 
comment,  a  sermon,  two  prayers,  three  psalms,  and 
a  blessing,  the  work  of  the  day,  upon  an  average  of 
the  length  of  the  service  in  that  age,  could  not 
occupy  less  than  twelve  hours,  during  which  time 
the  colony  was  collected,  and  kept  crowded  together 
in  the  guard-room  which  was  used  as  a  church,  in  a 
tropical  climate,  and  in  a  sickly  season.  The 
preachers  presented  a  paper  to  the  council,  which 
they  took  care  to  make  public,  requiring  them  to 
set  aside  a  day  for  solemn  fasting  and  humiliation  ; 
and,  under  pretence  of  enumerating  the  sins  of  the 
people,  they  poured  out  abuse  on  their  rulers.  They 
damped  the  courage  of  the  people  by  continually 
representing  hell  as  the  termination  of  life  to  most 
men,  because  most  men  are  sinners.  Carrying  the 
presbyterian  doctrine  of  predestination  to  an 
extreme,  they  put  a  stop  to  all  exertions,  by  show 
ing  that  the  consequences  of  these  depended  not  on 
the  individuals  by  whom  they  were  made,  but  on 
an  all-controlling  and  irresistible  power,  by  which, 
independently  of  human  efforts  and  volitions,  every 
thing  was  necessarily  determined.  They  converted 
the  numberless  accidents  to  whicli  soldiers  and  sea- 


THE   DARIEN   EXPEDITION.  247 

men  are  exposed  into  immediate  judgments  of  God 
against  their  sins ;  and  having  resolved  to  quit  tne 
settlement,  they,  in  excuse  for  doing  so,  wrote  bit 
ter  letters  to  the  general  assembly  against  the 
characters  of  the  colonists,  and  the  advantages  of 
the  colony  itself. 

One  of  these  men,  in  a  kind  of  history  of  the 
colony  which  he  published,  exulted  with  a  savage 
triumph  over  the  misfortunes  of  his  countrymen. 
"  They  were  such  a  rude  company,"  said  he,  "  that 
I  believe  Sodom  never  declared  such  impudence  in 
sinning  as  they.  An  observant  eye  might  see  that 
they  were  running  the  way  they  went ;  hell  and 
judgment  was  to  be  seen  upon  them,  and  in  them, 
before  the  time.  Their  cup  was  full ;  it  could  hold 
no  more :  they  were  ripe ;  they  must  be  cut  down 
with  the  sickle  of  the  wrath  of  God."  The  last 
party  which  joined  the  second  colony  at  Darien, 
after  it  had  been  three  months  settled,  was  Captain 
Campbell  of  Finab,  with  a  company  of  the  people 
of  his  own  estate,  whom  he  had  commanded  in 
Flanders,  and  whom  he  carried  to  Darien  in  his 
own  ship.  On  their  arrival  at  New  St.  Andrew, 
they  found  that  intelligence  had  been  received  that 
a  Spanish  force  of  1,600  men,  which  had  been 
brought  from  the  coast  of  the  South  Sea,  lay 
encamped  at  Tubucantee,  waiting  there  till  a 


248 


THE    DARIEN    EXPEDITION. 


Spanish  squadron  of  eleven  ships  which  was  ex 
pected  should  arrive,  when  they  were  jointly  to 
attack  the  fort.  The  military  command  was  offered 
to  Captain  Campbell,  in  compliment  to  his  reputa 
tion  and  to  his  birth  as  a  descendant  of  the  families 
Broadalbane  and  Athol.  In  order  to  prevent  a 
joint  attack,  he  resolved  to  attack  first;  and  there 
fore  on  the  second  day  after  his  arrival,  he  marched 
with  two  hundred  men  to  Tubucantee,  before  his 
approach  could  be  known  to  the  enemy,  stormed 
the  camp  in  the  night-time,  dissipated  the  Spanish 
force  with  much  slaughter,  and  returned  to  the  fort 
the  fifth  day.  But  he  found  the  Spanish  ships  off 
•the  harbor,  their  troops  landed,  and  almost  all  hope 
of  aid  or  of  provisions  cut  off;  yet  he  stood  a  siege 
of  nearly  six  weeks,  until  almost  all  the  officers  had 
died.  The  enemy,  by  their  approaches,  had  cut  off 
his  well,  and  his  ammunition  had  been  so  far  ex 
pended  that  he  was  obliged  to  melt  the  pewter 
dishes  of  the  garrison  into  balls.  The  garrison  then 
capitulated,  and  obtained  not  only  the  common 
honors  of  war  and  security  for  the  property  of  the 
company,  but  as  if  they  had  been  conquerors,  even 
exacted  hostages  for  the  performance  of  the  condi 
tions.  Captain  Campbell  alone  desired  to  be 
excepted  from  the  capitulation,  saying  that  he  was 
sure  the  Spaniards  would  not  forgive  him  the 


THE    DAETEN    EXPEDITION.  249 

mischief  which  he  so  lately  had  done  them.  But 
the  brave,  by  their  courage,  often  escape  that  death 
which  they  seem  to  provoke.  Captain  Campbell 
made  his  escape  in  his  vessel,  and  arrived  safely  at 
JN~ew  York,  whence  he  proceeded  to  Scotland, 
where  the  company  presented  him  with  a  gold 
medal,  in  which  his  bravery  was  duly  commemo 
rated.  The  lord-lyon  king-at-arms,  whose  office  it 
is  in  Scotland  to  confer  badges  of  distinction  upon 
honorable  actions  according  to  the  rules  of  heraldry, 
also  granted  him  a  Highlander  and  an  Indian  as 
supporters  to  his  coat  of  arms. 

But  a  harder  fate  attended  those  whom.  Captain 
Campbell  had  left  at  Darien.  They  were  so  weak 
in  their  health  as  not  to  be  able  to  weigh  up  the 
anchors  of  the  Rising  Sun,  one  of  their  ships,  which 
carried  sixty  guns;  the  generous  Spaniards,  how 
ever,  assisted  them.  In  going  out  of  the  harbor 
the  vessel  ran  aground.  The  prey  was  tempting ; 
and,  to  obtain  it,  the  Spaniards  had  only  to  stand 
by  and  look  on ;  but  they  showed  that  mercy  to  the 
Scotch  in  distress,  which-  one  of  their  own  country 
men,  General  Elliot,  afterward  returned  to  the 
posterity  of  these  Spaniards  at  the  siege  of  Gibral 
tar.  The  Darien  ships  being  leaky  and  weakly 
manned,  were  obliged  in  their  voyage  to  take 
shelter  in  different  ports  belonging  to  Spain  and 

11* 


250  THE    DARIEN    EXPEDITION. 

England.  But  the  Spaniards  in  the  new  world 
treated  them  with  uniform  kindness,  while  the 
English  governments  showed  them  none  ;  and  one 
of  their  ships  was  seized  and  detained.  In  fact, 
only  Captain  Campbell's  ship  and  another  small 
one  were  saved.  The  Rising  Sun  was  lost  on 
the  bar  of  Charlestown  ;  and  of  the  colony, 
not  more  than  thirty,  saved  from  war,  ship 
wreck,  or  disease,  ever  returned  to  their  'native 
country. — (^OTE  8.) 

Paterson,  who  had  withstood  the  blow,  could  not 
endure  the  reflection  of  misfortune.  He  was  seized 
with  a  lunacy  in  his  passage  home,  after  the  ruin 
of  the  first  colony  ;  but  he  recovered  in  his  own 
country,  where  his  spirit,  still  ardent  and  unbroken, 
presented  a  new  plan  to  the  company,  founded  on 
the  idea  of  King  William,  that  England  should 
have  the  joint  dominion  of  the  settlement  with 
Scotland.  He  survived  many  years  in  Scotland, 
pitied,  respected,  but  neglected.  After  the  union 
of  the  two  kingdoms,  he  claimed  reparation  of 
his  losses  from  the  equivalent  money  obtained  by 
England  to  the  Darien  Company,  but  was  paid 
nothing;  because  a  grant  to  him  from  a  public 
fund  would  have  been  only  an  act  of  humanity, 
and  not  a  political  job.  Thus  ended  the  colony  of 
Darien ;  an  adveature  which,  in  its  disastrous 


THE   DABIEN   EXPEDITION.  251 

* 

results,  inflicted  a  severe  blow  upon  Scotland,  and 
excited  feelings  of  deep  hostility  toward  the 
English  government  and  nation,  which  half  a 
century  was  scarcely  sufficient  to  extinguish. 


NOTES  TO  DAKIEN  EXPEDITION. 

(1.)  THE  time  and  expense  of  navigation  to 
China,  Japan,  the  Spice  Islands,  and  the  far  great 
est  part  of  the  East  Indies,  will  be  lessened  more 
than  half,  and  the  consumption  of  European  com 
modities  and  manufactures  will  soon  be  more  than 
doubled.  Trade  will  increase  trade,  and  money 
will  beget  money,  and  the  trading  world  shall  need 
no  more  to  want  work  for  their  hands,  but  will 
rather  want  hands  for  their  work.  Thus,  this  door 
of  the  seas,  and  the  key  of  the  universe,  with  any 
thing  of  a  reasonable  management,  will,  of  course, 
enable  its  proprietors  to  give  laws  to  both  oceans  and 
to  become  arbitrators  of  the  commercial  world,  with 
out  being  liable  to  the  fatigues,  expenses,  and  dan 
gers,  or  contracting  the  guilt  and  blood  of  Alexander 
and  Caesar.  In  all  our  empires,  tfcat  have  been 
anything  universal,  the  conquerors  have  been 
obliged  to  seek  out  and  court  their  conquests  from 
afar  ;  but  the  universal  force  an'd  influence  of  this 
attractive  magnet  is  such,  as  can  much  more  effect- 


NOTES.  253 

ually  bring  empire  home  to  its  proprietors'  doors. 
But,  from  what  hath  been  said,  you  may  easily 
perceive  that  the  nature  of  these  discoveries  is  such 
as  not  to  be  engrossed  by  any  one  nation  or  people, 
with  exclusion  to  others;  nor  can  it  be  thus 
attempted  without  evident  hazard  and  ruin,  as  we 
see  in  the  case  of  Spain  and  Portugal,  who,  by  their 
prohibiting  any  other  people  to  trade,  or  so  much 
as  go  to  or  dwell  in  the  Indies,  have  not  only  lost 
that  trade  they  were  not  able  to  maintain,  but  have 
depopulated  and  ruined  their  countries  therewith ; 
so  that  the  Indies  have  rather  conquered  Spain  and 
Portugal  than  they  have  conquered  the  Indies ;  for, 
by  their  permitting  all  to  go  out,  and  none  to  come 
in.  they  have  not  only  lost  the  people  which  are 
gone  to  these  remote  and  luxuriant  regions,  but 
such  as  remain  are  become  wholly  unprofitable  and 
good  for  nothing.  Thus,  not  unlike  the  case  of  the 
dog  in  the  fable,  they  have  lost  their  own  coun 
tries,  and  yet  not  gotten  the  Indies.  People  and 
their  industry  are  the  true  riches  of  a  prince  or 
nation ;  and  in  respect  to  them,  all  other  things  are 
imaginary.  This  was  well  understood  by  the 
people  of  Home,  who,  contrary  to  the  maxims  of 
Sparta  and  Spain,  by  general  naturalizations, 
liberty  of  conscience,  and  immunity  of  government, 
far  more  effectually  and  advantageously  conquerea 


254  DARIEN   EXPEDITION. 

and  kept  the  world  than  ever  they  did,  or  possibly 
could  have  done,  by  the  sword. — DALRYMPLE'S 
Extracts  from  Patersorfs  own  Papers. 

ENTHUSIASM   OF   THE    SCOTCH. 

BJ 

(2.)  That  extraordinary  projector  (Paterson)  had 
transported  the  ordinary  cool  and  calculating  Scots 
almost  out  of  their  senses.  From  high  to  low,  all 
his '  countrymen  were  visited  by  day-dreams  of 
sudden  and  enormous  wealth,  by  visions  of  gold, 
and  of  nothing  but  gold.  The  new  company, 
which  included  some  of  the  noblest  and  most 
intellectual  of  the  Scottish  nation,  had  caused  six 
stout  ships  to  be  built  in  Holland,  and  many  of  the 
aristocracy  had  embarked  their  younger  sons,  con 
fident  that  they  were  putting  them  on  the  sure  road 
to  wealth  and  distinction.  Several  lords  denuded 
their  estates  to  send  out  their  vassals  and  tenantry ; 
and  many  officers  who  had  been  disbanded  by  the 
late  peace  had  ventured  their  persons  and  their 
little  property. — Pict.  Hist,  of  Eng.,  vol.  iv.  p.  95. 

DIFFICULTIES   AT   THE   START. 

(3.)  The  clamor  in  Scotland  increased  against  the 
ministry,  who  had  disowned  their  company,  and  in 
a  great  measure  defeated  their  design,  from  which 


NOTES.  255 

they  had  promised  themselves  such  heaps  of  trea 
sure At  Madeira  they  took  in  a  supply 

of  wine,  and  then  returned  to  Crab  Island,  in  the 
neighborhood  of  St.  Thomas,  lying  between  Santa 
Cruz  and  Porto  Eico.  Their  design  was  to  take 
possession  of  this  little  island;  but  when  they 
entered  the  road,  they  saw  a  large  tent  pitched 
upon  the  strand,  and  the  Danish  colors  flying. 
Finding  themselves  anticipated  in  this  quarter, 
they  directed  their  course  to  the  coast  of  Darien.  .  .  . 
— SMOLLETT. 

OPPOSITION  OF  THE  ENGLISH. 

(4.)  They  represented  that,  in  consequence  of  the 
exemption  from  taxes,  and  other  advantages  granted 
to  the  Scottish  company,  that  kingdom  would 
become  a  free  port  for  all  East  and  "West  India 
commodities;  that  the  Scots  would  be  enabled  to 
supply  all  Europe  at  a  cheaper  rate  than  the  Eng 
lish  could  afford  to  sell  their  merchandise  for ; 
therefdre,  England  would  lose  the  benefit  of  its 
foreign  trade ;  besides,  they  observed  that  the  Scots 
would  smuggle  their  commodities  into  England,  to 
the  great  detriment  of  his  majesty  and  his  customs. 
— Hid. 

(5.)  But  there  was  another  cause  more  powerful 


256  DARIEN    EXPEDITION. 

than  the  remonstrances  of  the  Spanish  court,  to 
which  this  colony  fell  a  sacrifice ;  and  that  was,  the 
jealousy  of  the  English  traders  and  planters.  .  .  . 
The  English  apprehended  that  their  planters  would 
be  allured  into  this  new  colony  by  the  double 
prospect  of  finding  gold  and  plundering  the  Span 
iards,  and  that  the  settlement  would  produce  a 
rupture  with  Spain;  in  consequence  of  which,  the 
English  effects  in  that  kingdom  would  be  confis 
cated. — Ibid. 

OPPOSITION   OF   THE   DUTCH. 

(6.)  The  Dutch,  too,  are  said  to  have  been 
jealous  of  the  company,  which,  in  time,  might 
have  proved  their  competitors  in  the  illicit  com 
merce  to  the  Spanish  main,  and  to  have  hardened 
the  king's  heart  against  the  new  settlers. — Tbid. 

(7.)  It  was  further  given  out,  to  raise  the  national 
disgust  yet  higher,  that  the  opposition  the  king 
gave  to  the  Scotch  colony  flowed  neither  from  a 
regard  to  the  interests  of  England,  nor  to  the 
treaties  with  Spain,  but  from  a  care  of  the  Dutch, 
who,  from  Curaeoa,  drove  a  coasting  trade  among 
the  Spanish  plantations  with  great  advantage ; 
which,  they  said,  the  Scotch  colony,  if  once  settled, 
would  draw  only  away  from  them. — BUKNET. 


NOTES.  257 


DISASTROUS    RESULT. 

(8.)  Thus  vanished  all  the  golden  dreams  of  the 
Scottish  nation,  which  had  engaged  in  this  design 
with  incredible  eagerness,  and  even  embarked  a 
greater  sum  of  money  than  ever  they  had  advanced 
upon  any  other  occasion.  They  were  now  not  only 
disappointed  in  their  expectations  of  wealth  and 
affluence,  but  a  great  number  of  families  were 
absolutely  ruined  by  the  miscarriage  of  the  design, 
which  they  imputed  solely  to  the  conduct  of  King 
William.  The  whole  kingdom  of  Scotland  seemed 
to  join  in  the  clamor  that  was  raised  against  their 
sovereign,  taxed  him  with  double-dealing,  inhu 
manity,  and  base  ingratitude,  to  a  people  who  had 
lavished  their  treasure  and  best  blood  in  support 
of  his  government  and  in  the  gratification  of  his 
ambition  ;  and  had  their  power  been  equal  to  their 
animosity,  in  all  probability  a  rebellion  would  have 
ensued. — SMOLLETT. 


THE  SOUTH   SEA  BUBBLE. 


At  length  corruption,  like  a  general  flood, 
Did  deluge  all ;  and  avarice  creeping  on, 
Spread,  like  a  low-born  mist,  and  hid  the  sun. 
Statesmen  and  patriots  plied  alike  the  stocks, 
Peeress  and  butler  shared  alike  the  box; 
And  judges  jobbed,  and  bishops  bit  the  town, 
And  mighty  dukes  packed  cards  for  half-a-crown : 
Britain  was  sunk  in  lucre's  sordid  charms. 

POPE. 


259 


THE  SOUTH  SEA  BUBBLE. 

THE  South  Sea  Company  was  originated  by  the 
celebrated  Harley,  Earl  of  Oxford,  in  the  year  1711, 
with  the  view  of  restoring  public  credit,  which  had 
suffered  by  the  dismissal  of  the  whig  ministry,  and 
of  providing  for  the  discharge  of  the  army  and 
navy  debentures,  and  other  parts  of  the  floating 
debt,  amounting  to  nearly  ten  millions  sterling.  A 
company  of  merchants,  at  that  time  without  a  name, 
took  this  debt  upon  themselves,  and  the  government 
agreed  to  secure  them  for  a  certain  period  the  in 
terest  of  six  per  cent.  To  provide  for  this  interest, 
amounting  to  £600,000  per  annum,  the  duties  upon 
wines,  vinegar,  India  goods,  wrought  silks,  tobacco, 
whale-fins,  and  some  other  articles,  were  rendered 
permanent.  The  monopoly  of  the  trade  to  the 
South  Seas  was  granted,  and  the  company,  being  in 
corporated  by  act  of  parliament,  assumed  the  title 
by  which  it  has  ever  since  been  known.  The  minis 
ter  took  great  credit  to  himself  for  his  share  in  this 
transaction,  and  the  scheme  was  always  called  by 
his  flatterers  "  the  Earl  of  Oxford's  masterpiece." 

261 


THE   SOUTH    SEA   BUBBLE. 

Even  at  this  early  period  of  its  history,  the  most 
visionary  ideas  were  formed  by  the  company  and 
the  public  of  the  immense  riches  of  the  eastern 
coast  of  South  America.  Everybody  had  heard  of 
the  gold  and  silver  mines  of  Peru  and  Mexico; 
every  one  believed  them  to  be  inexhaustible,  and 
that  it  was  only  necessary  to  send  the  manufactures 
of  England  to  the  coast  to  be  repaid  a  hundred  fold 
in  gold  and  silver  ingots  by  the  natives.  A  report 
industriously  spread,  that  Spain  was  willing  to  con 
cede  four  ports  on  the  coasts  of  Chili  and  Peru  for 
the  purposes  of  traffic,  increased  the  general  confi 
dence,  and  for  many  years  the  South  Sea  Com 
pany's  stock  was  in  high  favor. 

Philip  Y.  of  Spain,  however,  never  had  any  in 
tention  of  admitting  the  English  to  a  free  trade  in 
the  ports  of  Spanish  America.  Negotiations  were 
set  on  foot,  but  their  only  result  was  the  assiento 
contract,  or  the  privilege  of  supplying  the  colonies 
with  negroes  for  thirty  years,  and  of  sending  once 
a  year  a  vessel,  limited  both  as  to  tonnage  and 
value  of  cargo,  to  trade  with  Mexico,  Peru,  or 
Chili.  The  latfer  permission  was  only  granted 
upon  the  hard  condition,  that  the  King  of  Spain 
should  enjoy  one-fourth  of  the  profits,  and  a  tax  of 
five  per  cent,  on  the  remainder.  This  was  a  great 
disappointment  to  the  Earl  of  Oxford  and  his  party, 


THE    SOUTH    SEA   BUBBLE.  263 

who  were  reminded  much  oftener  than  they  found 
agreeable,  of  the 

"Parturiunt  montes,  nascitur  ridiculus  mus." 

But  the  public  confidence  in  the  South  Sea  Com 
pany  was  not  shaken.  The  Earl  of  Oxford  declared 
that  Spain  would  permit  two  ships,  in  addition  to 
the  annual  ship,  to  carry  out  merchandise  during 
the  first  year ;  and  a  list  was  published,  in  which 
all  the  ports  and  harbors  of  these  coasts  were  pom 
pously  set  forth  as  open  to  the  trade  of  Great  Bri 
tain.  The  first  voyage  of  the  annual  ship  was  not 
made  till  the  year  1717,  and  in  the  following  year 
the  trade  was  suppressed  by  the  rupture  with  Spain. 
The  king's  speech  at  the  opening  of  the  session 
of  1717,  made  pointed  allusion  to  the  state  of  pub 
lic  credit,  and  recommended  that  proper  measures 
should  be  taken  to  reduce  the  national  debt.  The 
two  great  monetary  corporations,  the  South  Sea 
Company  and  the  Bank  of  England,  made  pro 
posals  to  parliament  on  the  20th  of  May  ensuing. 
The  South  Sea  Company  prayed  that  their  capital 
stock  of  ten  millions  might  be  increased  to  twelve, 
by  subscription  or  otherwise,  and  offered  to  accept 
five  per  cent,  instead  of  six,  upon  the  whole 
amount.  The  bank  made  proposals  equally  advan 
tageous.  The  House  debated  for  some  time,  and 


264:  THE    SOUTH    SEA   BUBBLE. 

finally  three  acts  were  passed,  called  the  South  Sea 
Act,  the  Bank  Act,  and  the  General  Fund  Act. 
By  the  first,  the  proposals  of  the  South  Sea  Com 
pany  were  accepted,  and  that  body  held  itself 
ready  to  advance  the  sum  of  two  millions  toward 
discharging  the  principal  and  interest  of  the  debt 
due  by  the  state  for  the  four  lottery  funds  of  the 
ninth  and  tenth  years  of  Queen  Anne.  By  the 
second  act  the  bank  received  a  lower  rate  of  inte 
rest  for  the  sum  of  £1,775,027  15s.  due  to  it  by 
the  state,  and  agreed  to  deliver  up  to  be  cancelled 
as  many  exchequer  bills  as  amounted  to  .two  mil 
lions  sterling,  and  to  accept  of  an  annuity  of  one 
hundred  thousand  pounds,  being  after  the  rate  of 
five  per  cent.,  the  whole  redeemable  at  one  year's 
notice.  They  were  further  required  to  be  ready  to 
advance,  in  case  of  need,  a  sum  not  exceeding 
£2,500,000  upon  the  same  terms  of  five  per  cent, 
interest,  redeemable  by  parliament.  The  General 
Fund  Act  recited  the  various  deficiencies,  which 
were  to  be  made  good  by  the  aids  derived  from  the 
foregoing  sources. 

The  name  of  the  South  Sea  Company  was  thus 
continually  before  the  public.  Though  their  trade 
with  the  South  American  States  produced  little  or 
no  augmentation  of  their  revenues,  they  continued 
to  flourish  as  a  monetary  corporation.  Their  stock 


THE   SOUTH   SEA   BUBBLE.  265 

was  in  high  request,  and  the  directors,  buoyed  up 
with  success,  began  to  think  of  new  means  for  ex 
tending  their  influence.  The  Mississippi  scheme  of 
John  Law,  which  so  dazzled  and  captivated  the 
French  people,  inspired  them  with  an  idea  that 
they  could  carry  on  the  same  game  in  England. 
The  anticipated  failure  of  his  plans  did  not  divert 
them  from  their  intention.  Wise  in  their  own  con 
ceit,  they  imagined  they  could  avoid  his  faults, 
carry  on  their  schemes  forever,  and  stretch  the  cord 
of  credit  to  its  extremest  tension,  without  causing 
it  to  snap  asunder. 

It  was  while  Law's  plan  was  at  its  greatest  height 
of  popularity,  while  people  were  crowding  in  thou 
sands  to  the  rue  Quincampoix,  and  ruining  them 
selves  with  frantic  eagerness,  that  the  South  Sea 
directors  laid  before  parliament  their  famous  plan 
for  paying  off  the  national  debt.  Visions  of  bound 
less  wealth  floated  before  the  fascinated  eyes  of  the 
people  in  the-  two  most  celebrated  countries  of 
Europe.  The  English  commenced  their  career  of 
extravagance  somewhat  later  than  the  French;  but 
as  soon  as  the  delirium  seized  them  they  were  de 
termined  not  to  be  outdone.  Upon  the  22d  of  Jan 
uary,  1720,  the  House  of  Commons  resolved  itself 
*  into  a  committee  of  the  whole  House,  to  take  into 

consideration  that  part  of  the  king's  speech  at  the 

12 


266  THE    SOUTH    SEA   BUBBLE. 

opening  of  the  session  which  related  to  the  public 
debts,  and  the  proposal  of  the  South  Sea  Company 
toward  the  redemption  and  sinking  of  the  same. 
The  proposal  set  forth  at  great  length,  and  under 
several  heads,  the  debts  of  the  state,  amounting  to 
£30,981,712,  which  the  company  were  anxious  to 
take  upon  themselves,  upon  consideration  of  five 
•  per  cent,  per  annum,  secured  to  them  until  Mid 
summer,  1727 ;  after  which  time,  the  whole  .was  to 
become  redeemable  at  the  pleasure  of  the  legisla 
ture,  and  the  interest  to  be  reduced  to  four  per 
cent.  The  proposal  was  received  with  great  favor ; 
but  the  Bank  of  England  had  many  friends  in  the 
House  of  Commons,  who  were  desirous  that  that 
body  should  share  in  the  advantages  that  were 
likely  to  accrue.  On  behalf  of  this  corporation  it 
was  represented,  that  they  had  performed  great 
and  eminent  services  to  the  state  in  the  most  diffi 
cult  times,  and  deserved,  at  least,  that  if  any  ad 
vantage  was  to  be  made  by  public  bargains  of  this 
nature,  they  should  be  preferred  before  a  company 
that  had  never  done  anything  for  the  nation.  The 
further  consideration  of  the  matter  was  accordingly 
postponed  for  five  days.  In  the  meantime  a  plan 
was  drawn  up  by  the  governors  of  the  bank.  The 
South  Sea  Company,  afraid  that  the  bank  might 
offer  still  more  advantageous  terms  to  the  govern 


THE   SOUTH   SEA   BUBBLE.  267 

ment  than  themselves,  reconsidered  their  former 
proposal,  and  made  some  alterations  in  it,  which 
they  hoped  would  render  it  more  acceptable.  The 
principal  change  was  a  stipulation  that  the  govern 
ment  might  redeem  these  debts  at  the  expiration  of 
four  years,  instead  of  seven,  as  at  first  suggested. 
The  bank  resolved  not  to  be  outbidden  in  this  sin 
gular  auction,  and  the  governors  also  reconsidered 
their  first  proposal,  and  sent  in  a  new  one. 

Thus,  each  corporation  having  made  two  pro 
posals,  the  House  began  to  deliberate.  Mr.  Eobert 
Walpole  was  the  chief  speaker  in  favor  of  the 
bank,  and  Mr.  Aislabie,  the  Chancellor  of  the  Ex 
chequer,  the  principal  advocate  on  behalf  of  the 
South  Sea  Company.  It  was  resolved,  on  the  2d 
of  February,  that  the  proposals  of  the  latter  were 
most  advantageous  to  the  country.  They  were 
accordingly  received,  and  leave  was  given  to  bring 
in  a  bill  to  that  effect. 

Exchange  Alley  was  in  a  fever  of  excitement. 
The  company's  stock,  which  had  been  at  a  hundred 
and  thirty  the  previous  day,  gradually  rose  to  three 
hundred,  and  continued  to  rise  with  the  most  aston 
ishing  rapidity  during  the  whole  time  that  the  bill 
in  its  several  stages  was  under  discussion.  Mr. 
Walpole  was  almost  the  only  statesman  in  the 
House  who  spoke  out  boldly  against  it.  He  warned 


\ 

s     • 
x 


THE   SOUTH   SEA  BUBBLE. 

them,  in  eloquent  and  solemn  language,  of  the  evils 
that  would  ensue.  It  countenanced,  he  said,  "  the 
dangerous  practice  of  stock-jobbing,  and  would 
divert  the  genius  of  the  nation  from  trade  and 
industry-.  It  would  hold  out  a  dangerous  lure  to 
decoy  the  unwary  to  their  ruin,  by  making  them 
part  with  the  earnings  of  their  labor  for  a  prospect 
of  imaginary  wealth.  The  great  principle  of  the 
project  was  an  evil  of  first-rate  magnitude;  it  was 
to  raise  artificially  the  value  of  the  stock,  by  excit 
ing  and  keeping  up  a  general  infatuation,  and  by 
promising  dividends  out  of  funds  which  could  never 
be  adequate  to  the  purpose."  In  a  prophetic  spirit 
he  added,  that  if  the  plan  succeeded,  the  directors 
would  become  masters  of  the  government,  form  a 
new  and  absolute  aristocracy  in  the  kingdom,  and 
control  the  resolutions  of  the  legislature.  If  it 
failed,  which  he  was  convinced  it  would,  the  result 
would  bring  general  discontent  and  ruin  upon  the 
country.  Such  would  be  the  delusion,  that  when 
the  evil  day  came,  as  come  it  would,  the  people 
would  start  up,  as  from  a  dream,  and  ask  them 
selves  if  these  things  could  have  been  true.  All 
his  eloquence  was  in  vain.  He  was  looked  upon  as 
a  false  prophet,  or  compared  to  the  hoarse  raven-, 
croaking  omens  of  evil.  His  friends,  however, 
compared  him  to  Cassandra,  predicting  evils  which 


THE   SOUTH    SEA   BUBBLE.  269 

would  only  be  believed  when  they  came  home  to 
men's  hearths,  and  stared  them  in  the  face  at  their 
own  boards.  Although,  in  former  times,  the  House 
had  listened  with  the  utmost  attention  to  every 
word  that  fell  from  his  lips,  the  benches  became 
deserted  when  it  was  known  that  he  would  speak 
on  the  South  Sea  question. 

The  bill  was  ^;wo  months  in  .its  progress  through 
the  House  of  Commons.  During  this  time  every 
exertion  was  made  by  the  directors  and  their  friends, 
and  more  especially  by  the  chairman,  the  noted 
Sir  John  Blunt,  to  raise  the  price  of  the  stock. 
The  most  extravagant  rumors  were  in  circulation. 
Treaties  between  England  and  Spain  were  spoken 
of,  whereby  the  latter  was  to  grant  a  free  trade  to 
all  her  colonies  ;  and  the  rich  produce  of  the  mines 
of  Potosi-la-Paz  was  to  be  brought  to  England  until 
silver  should  become  almost  as  plentiful  as  iron. 
For  cotton  and  woollen  goods,  which  could  be  sup 
plied  to  them  in  abundance,  the  dwellers  in  Mexico 
were  to  empty  their  golden  mines.  The  company 
of  merchants  trading  to  the  South  Seas  would  be 
the  richest  the  world  ever  saw,  and  every  hundred 
pounds  invested  in  it  would  produce  hundreds  per 
annum  to  the  stockholder.  At  last  the  stock  was 
raised  by  these  means  to  near  four  hundred ;  but, 
after  fluctuating  a  good  deal,  settled  at  three  hun- 


270  THE    SOUTH   SEA   BUBBLE. 

dred  and  thirty,  at  which  price  it  remained  when 
thq  bill  passed  the  Commons  by  a  majority  of  172 
against  55. — (ISToTE  1.) 

In  the  House  of  Lords  the  bill  was  hurried 
through  all  its  stages  with  unexampled  rapidity. 
On  the  4th  of  April  it  was  read  a  first  time ;  on 
the  5th,  it  was  read  a  second  time ;  on  the  6th,  it 
was  committed  ;  and  on  the  7th,  was  read  a  third 
time  and  passed. 

Several  peers  spoke  warmly  against  the  scheme ; 
but  their  warnings  fell  upon  dull,  cold  ears.  A 
speculating  frenzy  had  seized  them  as  well  as  the 
plebeians.  Lord  North  and  Grey  said  the  bill  was 
unjust  in  its  nature,  and  might  prove  fatal  in  its 
consequences,  being  calculated  to  enrich  the  few 
and  impoverish  the  many.  The  Duke  of  "Wharton 
followed  ;  but,  as  he  only  retailed  at  second-hand 
the  arguments  so  eloquently  stated  by  Walpole  in 
the  Lower  House,  he  was  not  listened  to  with  even 
ihe  same  attention  that  had  been  bestowed  upon 
Lord  North  and  Grey.  Earl  Cowper  followed  on 
the  same  side,  and  compared  the  bill  to  the  famous 
horse  of  the  siege  of  Troy.  Like  that,  it  was 
ushered  in  and  received  with  great  pomp  and  accla-  ' 
mations  of  joy,  but  bore  within  it  treachery  and 
destruction.  The  Earl  of  Sunderland  endeavored 
to  answer  all  objections ;  and  on  the  question  being 


THE    SOUTH    SEA   BUBBLE.  271 

put,  there  appeared  only  seventeen  peers  against, 
and  eighty-three  in  favor  of  the  project.  The  very 
same  day  on  which  it  passed  the  Lords,  it  received 
the  royal  assent,  and  became  the  law  of  the  land. 

It  seemed  at  that  time  as  if  the  whole  nation  had 
turned  stock-jobbers.  Exchange  Alley  was  every 
day  blocked  up  by  crowds,  and  Cornhill  was  impass 
able  for  the  number  of  carriages.  Everybody 
came  to  purchase  stock.  "  Every  fool  aspired  to  be 
a  knave."  In  the  words  of  a  ballad  published  at 
the  time,  and  sung  about  the  streets,* 

"  Then  stars  and  garters  did  appear 

Among  the  meaner  rabble  ; 
To  buy  and  sell,  to  see  and  hear 
The  Jews  and  Gentiles  squabble. 

"The  greatest  ladies  thither  came, 

And  plied  in  chariots  daily, 
Or  pawned  their  jewels  for  a  sum 
To  venture  in  the  Alley." 

The  inordinate  thirst  of  gain  that  had  afflicted 
all  ranks  of  society  was  not  to  be  slaked  even  in 
the  South  Sea.  Other  schemes,  of  the  most  extra 
vagant  kind,  were  started.  The  share-lists  were 
speedily  filled  up,  and  an  enormous  traffic  carried 

=*  A  South-Sea  Ballad ;  or,  Merry  Remarks  upon  Exchange- Alley 
Bubbles.  To  a  new  tune  called  "  The  Grand  Elixir ;  or,  the  Philo 
sopher's  Stone  discovered." 


272        ,  THE    SOUTH    SEA    BUBBLE. 

on  in  shares,  while,  of  course,  every  means  were 
resorted  to  to  raise  them  to  an  artificial  value  in 
the  market. 

r  Contrary  to  all  expectation,  South  Sea  stock  fell 
when  the  bill  received  the  royal  assent.  On  the 
7th  of  April  the  shares  were  quoted  at  three  hun 
dred  and  ten,  and  on  the  following  day  at  two  hun 
dred  and  ninety.  Already  the  directors  had  tasted 
the  profits  of  their  scheme,  and  it  was  not  likely 
that  ttrey  should  quietly  allow  the  stock  to  find  its 
natural  level  without  an  effort  to  raise  it.  Imme 
diately  their  busy  emissaries  were  set  to  work. 
Every  person  interested  in  the  success  of  the  pro 
ject  endeavored  to  draw  a  knot  of  listeners  around 
him,  to  whom  he  expatiated  on  the  treasures  of  the 
South  American  seas.  Exchange  Alley  was  crowd 
ed  with  attentive  groups.  One  rumor  alone, 
asserted  with  the  utmost  confidence,  had  an  imme 
diate  effect  upon  the  stock.  It  was  said  that  Earl 
Stanhope  had  received  overtures  in  France  from  the 
Spanish  government  to  exchange  Gibraltar  and 
Port  Mahon  for  some  places  on  the  coast  of  Peru, 
for  the  security  and  enlargement  of  the  trade  in  the 
South  Seas.  Instead  of  one  annual  ship  trading  to 
those  ports,  and  allowing  the  king  of  Spain  twenty- 
five  per  cent,  out  of  the  profits,  the  company  might 
build  and  charter  as  many  ships  as  they  pleased, 


THE    SOUTH    SEA  BUBBLE.  273 

and  pay  no  percentage  whatever  to  any  foreign 
potentate, 

"  Visions  of  ingots  danced  before  their  eyes," 

and  stock  rose  rapidly.  On  the  12th  of  April,  five  ' 
days  after  the  bill  had  become  law,  the  directors 
opened  their  books  for  a  subscription  of  a  million, 
at  the  rate  of  £300  for  every  £100  capital.  Such 
was  the  concourse  of  persons  of  all  ranks,  that  this 
first  subscription  was  found  to  amount  to  above  two 
millions  of  original  stock.  It  was  to  be  paid  in  five 
payments,  of  £60  each  for  every  £100.  In  a  few 
days  the  stock  advanced  to  three  hundred  and  forty, 
and  the  subscriptions  were  sold  for  double  the  price 
of  the  first  payment.  To  raise  the  stock  still  higher, 
it  was  declared,  in  a  general  court  of  directors,  on 
the  21st  of  April,  that  the  midsummer  dividend 
should  be  ten  per  cent.,  and  that  all  subscriptions 
should  be  entitled  to  the  same.  These  resolutions 
answering  the  end  designed,  the  directors,  to  im 
prove  the  infatuation  of  the  moneyed  men,  opened 
their  books  for  a  second  subscription  of  a  million, 
at  four  hundred  per  cent.  Such  was  the  frantic 
eagerness  of  people  of  every  class  to  speculate  in 
these  funds,  that  in  the  course  of  a  few  hours  no 
less  than  a  million  and  a  half  was  subscribed  at 
that  rate.— (NOTES  7,  8.) 

12* 


274:  THE   SOUTH    SEA   BUBBLE. 

In  the  meantime,  innumerable  joint-stock  com 
panies  started  up  everywhere.  They  soon  received 
the  name  of  Bubbles,  the  most  appropriate  that 
imagination  could  devise.  The  populace  are  often 
most  happy  in  the  nicknames  they  employ.  None 
could  be  more  apt  than  that  of  Bubbles.  Some  of 
them  lasted  for  a  week  or  a  fortnight,  and  were  no 
more  heard  of,  while  others  could  not  even  live  out 
that  short  span  ^of  existence.  Every  evening  pro 
duced  new  ^chemes,  and  every  morning  new  pro 
jects.  The  highest  of  the  aristocracy  were  as  eager 
in  this  hot  pursuit  of  gain  as  the  most  plodding  job 
ber  in  Cornhill.  The  Prince  of  Wales  became 
governor  of  one  company,  and  is  said  to  have 
cleared  £40,000,  by  his  speculations.*  The  Duke 
of  Bridgewater  started  a  scheme  for  the  improve 
ment  of  London  and  Westminster,  and  the  Duke  of 
Chandos  another.  There  were  nearly  a  hundred 
different  projects,  each  more  extravagant  and 
deceptive  than  the  other.  To  use  the  words  of  the 
"  Political  State,"  they  were  "  set  on  foot  and  pro 
moted  by  crafty  knaves,  then  pursued  by  multi 
tudes  of  covetous  fools,  and  at  last  appeared  to  be, 
in  effect,  what  their  vulgar  appellation  denoted  them 
to  be — bubbles  and  mere  cheats."  It  was  com- 

*  Coxe's  "Walpole,"  Correspondence  between  Mr.  Secretary 
Craggs  and  Earl  Stanhope. — (NOTE  5.) 


THE    SOUTH   SEA   BUBBLE.  275 

puted  that  near  one  million  and  a  half  sterling  was 
won  and  lost  by  these  unwarrantable  practices,  to 
the  impoverishment  of  many  a  fool,  and  the  enrich 
ing  of  many  a  rogue. 

Some  of  these  schemes  were  plausible  enough, 
and,  had  they  been  undertaken  at  a  time  when  the 
public  mind  was  unexcited,  might  have  been  pur 
sued  with  advantage  to  all  concerned.  But  they 
were  established  merely  with  a  view  of  raising  the 
shares  in  the  market.  The  projectors  took  the  first 
opportunity  of  a  rise  to  sell  out,  and  next  morning 
the  scheme  was  at  an  end.  Maitland,  in  his  "  His 
tory  of  London,"  gravely  informs  us,  that  one  of 
the  projects  which  received  great  encouragement, 
was  for  the  establishment  of  a  company  "  to  make 
deal  boards  out  of  saw-dust."  This  is  no  doubt  in 
tended  as  a  joke ;  but  there  is  abundance  of  evidence 
to  show  that  dozens  of  schemes,  hardly  a  whit  more 
reasonable,  lived  their  little  day,  ruining  hundreds 
ere  they  fell.  One  of  them  was  for  a  wheel  for  per 
petual  motion — capital  one  million  ;  another  was 
"  for  encouraging  the  breed  of  horses  in  England,  and 
improving  of  glebe  and  church  lands,  and  repairing 
and  rebuilding  parsonage  and  vicarage  houses." 
Why  the  clergy,  who  were  so  mainly  interested  in 
the  latter  clause,  should  have  taken  so  much  in 
terest  in  the  first,  is  only  to  be  explained  on  the 


276 


THE   SOUTH    SEA   BUBBLE. 


supposition  that  the  scheme  was  projected  by  a 
knot  of  the  fox-hunting  parsons,  once  so  common 
in  England.  The  shares  of  this  company  were 
rapidly  subscribed  for.  But_thejmost  ajbsurd  and 
preposterous  of  all,  and  which  showed,  more  com 
pletely  than  any  other,  the  utter  madness  of  the 
people,  was  one  started  by  an  unknown  adventurer, 
entitled,  "  A  company  for  carrying  on  an  under 
taking  of  great  advantage^  ~but  nobody  to  know  what 
it  is."  Were  not  the  fact  stated  by  scores  of  credi 
ble  witnesses,  it  would  be  impossible  to  believe  that 
any  person  could  have  been  duped  by  such  a  pro 
ject.  The  man  of  genius  who  essayed  this  bold 
and  successful  inroad  upon  public  credulity,  merely 
stated  in  his  prospectus  that  the  required  capital 
was  half  a  million,  in  five  thousand  shares  of  £100 
each,  deposit  £2  per  share.  Each  subscriber,  pay 
ing  his  deposit,  would  be  entitled  to  £100  per  annum 
per  share.  How  this  immense  profit  was  to  be 
obtained,  he  did  not  condescend  to  inform  them  at 
that  time,  but  promised  that  in  a  month  full  parti 
culars  should  be  duly  announced,  and  a  call  made 
for  the  remaining  £98  of  the  subscription.  Next 
morning,  at  nine  o'clock,  this  great  man  opened  an 
office  in  Cornhill.  Crowds  of  people  beset  his  door, 
and  when  he  shut  up,  at  three  o'clock,  he  found 
that  no  less  than  one  thousand  shares  had  been  sub- 


THE    SOUTH    SEA   BUBBLE.  277 

scribed  for,  and  the  deposits  paid.  He  was  thus, 
in  five  hours,  the  winner  of  £2,000.  He  was  philoso 
pher  enough  to  be  contented  with  his  venture,  and 
set  off  the  same  evening  for  the  Continent.  He 
was  never  heard  of  again. 

Well  might  Swift  exclaim,  comparing  Change 
Alley  to  a  gulf  in  the  South  Sea : 

"  Subscribers  here  by  thousands  float, 

And  jostle  one  another  down, 
Each  paddling  in  his  leaky  boat, 
And  here  they  fish  for  gold  and  drown. 

"Now  buried  in  the  depths  below, 

Now  mounted  up  to  heaven  again, 
They  reel  and  stagger  to  and  fro, 

At  their  wits'  end,  like  drunken  men. 

"  Meantime,  secure  on  Garraway  cliffs, 

A  savage  race,  by  shipwrecks  fed, 

Lie  waiting  for  the  foundered  skiffs, 

And  strip  the  bodies  of  the  dead." 

Another  fraud  that  was  very  successful  was  that 
of  the  "Globe  Permits"  as  they  were  called. 
They  were  nothing  more  than  square  pieces  of  play 
ing-cards,  on  which  was  the  impression  of  a  seal, 
in  wax,  bearing  the  sign  of  the  Globe  Tavern,  in 
the  neighborhood  of  Exchange  Alley,  with  the  in 
scription  of  "  Sail-Cloth  Permits."  The  possessors 

8* 


278  THE   SOUTH    SEA    BUBBLE. 

enjoyed  no  other  advantage  from  them  than  per 
mission  to  subscribe  at  some  future  time  to  a  new 
sail-cloth  manufactory,  projected  by  one  who  was 
then  known  to  be  a  man  of  fortune,  but  who  was 
afterward  involved  in  the  peculation  and  punish 
ment  of  the  South  Sea  directors.  These  permits 
sold  for  as  much  as  sixty  guineas  in  the  Alley. 

Persons  of  distinction,  of  both  sexes,  were  deeply 
engaged  in  all  these  bubbles  ;  those  of  the  male  sex 
going  to  taverns  and  coffee-houses  to  meet  their 
brokers,  and  the  ladies  resorting  for  the  same  pur 
pose  to  the  shops  of  milliners  and  haberdashers. 
But  it  did  not  follow  that  all  these  people  believed 
in  the  feasibility  of  the  schemes  to  which  they  sub 
scribed  ;  it  was  enough  for  their  purpose  that  their 
shares  would,  by  stock-jobbing  arts,  be  soon  raised 
to  a  premium,  when  they  got  rid  of  them  with  all 
expedition  to  the  really  credulous.  So  great  was 
the  confusion  of  the  crowd  in  the  Alley,  that  shares 
in  the  same  bubble  were  known  to  have  been  sold 
at  the  same  instant  ten  per  cent,  higher  at  one  end 
of  the  alley  than  at  the  other.  Sensible  men  be 
held  the  extraordinary  infatuation  of  the  people 
with  sorrow  and  alarm.  There  were  some  both  in 
and  out  of  parliament  who  foresaw  clearly  the  ruin 
that  was  impending.  Mr.  Walpole  did  not  cease 
his  gloomy  forebodings.  His  fears  were  shared  by 


THE    SOUTH    SEA   BUBBLE.  279 

all  the  thinking  few,  and  impressed  most  forcibly 
upon  the  government.  On  the  llth  of  June,  the 
day  the  parliament  rose,  the  king  published  a 
proclamation,  declaring  that  all  these  unlawful  pro 
jects  should  be  deemed  public  nuisances,  and  .prose 
cuted  accordingly,  and  forbidding  any  broker, 
under  a  penalty  of  five  hundred  pounds,  from  buy 
ing  or  selling  any  shares  in  them.  Notwithstanding 
this  proclamation,  roguish  speculators  still  carried 
them  on,  and  the  deluded  people  still  encouraged 
them.  On  the  12th  of  July,  an  order  of  the  Lords 
Justices  assembled  in  privy  council  was  published, 
dismissing  all  the  petitions  that  had  been  presented 
for  patents  and  charters,  and  dissolving  all  the  bub 
ble  companies.  The  following  copy  of  their  lord 
ships'  order,  containing  a  list  of  all  these  nefarious 
projects,  will  not  be  deemed  uninteresting  at  the 
present  time,  when,  at  periodic  intervals,  there  is 
but  too  much  tendency  in  the  public  mind  to  in 
dulge  in  similar  practices : 

"  At  the  Council  Chamber,  Whitehall,  the  12th  day 
of  July,  1T20.  Present,  their  Excellencies  the 
Lords  Justices  in  Council. 

"  Their  Excellencies  the  Lords  Justices,  in  coun 
cil;    taking  into  consideration  the  many  inconve- 


280  THE   SOUTH    SEA   BUBBLE. 

niences  arising  to  the  public  from  several  projects 
set  on  foot  for  raising  of  joint-stock  for  various 
purposes,  and  that  a  great  many  of  his  majesty's 
subjects  have  been  drawn  in  to  part  with  their 
money  on  pretence  of  assurances  that  their 
petitions  for  patents  and  charters  to  enable  them  to 
carry  on  the  same  would  be  granted :  to  prevent 
such  impositions,  their  excellencies  this  day  ordered 
the  said  several  petitions,  together  with  such  reports 
from  the  Board  of  Trade,  and  from  his  majesty's 
attorney  and  solicitor-general,  as  had  been  obtained 
thereon,  to  be  laid  before  them ;  and  after  mature 
consideration  thereof,  were  pleased,  by  advice  of 
his  majesty's  privy  council,  to  order  that  the  said 
petitions  be  dismissed,  which  are  as  follow  : 

"  1.  Petition  of  several  persons,  praying  letters 
patent  for  carrying  on  a  fishing  trade  by  the  name 
of  the  Grand  Fishery  of  Great  Britain. 

"  2.  Petition  of  the  Company  of  the  Royal 
Fishery  of  England,  praying  letters  patent  for  such 
further  powers  as  will  effectually  contribute  to  carry 
on  the  said  fishery. 

"  3.  Petition  of  George  James,  on  behalf  of 
himself  and  divers  persons  of  distinction  concerned 
in  a  national  fishery,  praying  letters  patent  of  in 
corporation,  to  enable  them  to  carry  on  the  same. 

"4.  Petition  of  several  merchants,  traders,  and 


THE   SOUTH    SEA   BUBBLE.  281 

others,  wliose  names  are  thereunto  subscribed, 
praying  to  be  incorporated  for  reviving  and  carry 
ing  on  a  whale  fishery  to  Greenland  and  elsewhere. 

"  5.  Petition  of  Sir  John  Lambert  and  others 
thereto  subscribing,  on  behalf  of  themselves  and  a 
great  number  of  merchants,  praying  to  be  incorpo 
rated  for  carrying  on  a  Greenland  trade,  and  par 
ticularly  a  whale  fishery  in  Davis's  Straits. 

"  6.  Another  petition  for  a  Greenland  trade. 

"  7.  Petition  of  several  merchants,  gentlemen, 
and  citizens,  praying  to  be  incorporated  for  buying 
and  building  of  ships  to  let  or  freight. 

"  8.  Petition  of  Samuel  Antrim  and  others,  pray 
ing  for  letters  patent  for  sowing  hemp  and  flax. 

"9.  Petition  of  several  merchants,  masters  of 
ships,  sail-makers,  and  manufacturers  of  sail-cloth, 
praying  a  charter  of  incorporation,  to  enable  them 
to  carry  on  and  promote  the  said  manufactory  by  a 
joint-stock. 

"  10.  Petition  of  Thomas  Boyd  and  several  hun 
dred  merchants,  owners  and  masters  of  ships,  sail- 
makers,  weavers,  and  other  traders,  praying  a 
charter  of  incorporation,  empowering  them  to 
borrow  money  for  purchasing  lands,  in  order  to  the 
manufacturing  sail-cloth  and  fine  holland. 

"  11.  Petition  on  behalf  of  several  persons  in 
terested  in  a  patent  granted  by  the  late  King  Wil- 


282  THE    SOUTH    SEA   BUBBLE. 

Ham  and  Queen  Mary  for  the  making  of  linen  and 
sail-cloth,  praying  that  no  charter  may  be  granted 
to  any  persons  whatsoever  for  making  sail-cloth 
but  that  the  privilege  now  enjoyed  by  them  may 
be  confirmed,  and  likewise  an  additional  power 
to  carry  on  the  cotton  and  cotton-silk  manufac 
tures. 

"  12.  Petition  of  several  citizens,  merchants  and 
traders  in  London,  and  others,  subscribers  to  a 
British  stock  for  a  general  insurance  from  fire  in 
any  part  of  England,  praying  to  be  incorporated 
for  carrying  on  the  said  undertaking. 

"  13.  Petition  of  several  of  his  majesty's  loyal 
subjects  of  the  city  of  London  and  other  parts  of 
Great  Britain,  praying  to  be  incorporated  for  carry 
ing  on  a  general  insurance  from  losses  by  fire  within 
the  kingdom  of  England. 

"  14.  Petition  of  Thomas  Burges  and  others  his 
majesty's  subjects  thereto  subscribing,  in  behalf  of 
themselves  and  others,  subscribers  to  a  fund  of 
£1,200,000  for  carrying  on  a  trade  to  his  majesty's 
German  dominions,  praying  to  be  incorporated  by 
the  name  of  the  Harburg  Company. 

"  15.  Petition  of  Edward  Jones,  a  dealer  in  tim 
ber,  on  behalf  of  himself  and  others,  praying  to  be 
incorporated  for  the  importation  of  timber  from 
Germany. 


THE   SOUTH    SEA   BUBBLE.  283 

"16.  Petition  of  several  merchants  of  London, 
praying  a  charter  of  incorporation  for  carrying  on 
a  salt-work. 

"  1Y.  Petition  of  Captain  Macphedris,  of  London, 
merchant,  on  behalf 'of  himself  and  several  mer 
chants,  clothiers,  hatters,  dyers  and  other  traders, 
praying  a  charter  of  incorporation  empowering  them 
to  raise  a  sufficient  sum  of  money  to  purchase  lands 
for  planting  and  rearing  a  wood  called  madder,  for 
the  use  of  dyers. 

"18.  Petition  of  Joseph  Galendo,  of  London, 
snuff-maker,  praying  a  patent  for  his  invention  to 
prepare  and  cure  Virginia  tobacco  for  snuff  in 
Virginia,  and  making  it  into  the  same  in  all  his 
majesty's  dominions." 

LIST   OF   BUBBLES. 

The  following  Bubble-Companies  were  by  the 
same  order  declared  to  be  illegal,  and  abolished 
accordingly : 

1.  For  the  importation  of  Swedish  iron. 

2.  For  supplying  London  with  sea-coal.    Capital, 
three  millions. 

3.  For  building  and  rebuilding  houses  through 
out  all  England.     Capital,  three  millions. 

4.  For  making  of  muslin. 


284  THE    SOUTH    SEA   BUBBLE. 

5.  For  carrying  on  and  improving  the  British 
alum-works. 

6.  For  effectually  settling  the  island  of  Blanco 
and  Sal  Tartagus. 

7.  For  supplying  the  town  of  Deal  with  fresh 
water. 

8.  For  the  importation  of  Flanders  lace. 

9.  For  improvement  of  lands  in  Great  Britain. 
Capital,  four  millions. 

10.  For  encouraging  the  breed  of  horses  in  Eng 
land,  and  improving  of  glebe  and  church  lands,  and 
for  repairing  and  rebuilding  parsonage  and  vicar 
age  houses. 

11.  For  making  of  iron  and  steel  in  Great  Britain. 

12.  For  improving  the  land  in  the  county  of 
Flint.     Capital,  one  million. 

13.  For  purchasing  lands  to  build  on.     Capital, 
two  millions. 

14.  For  trading  in  hair. 

15.  For  erecting  salt-works  in  Holy  Island.  Capi 
tal,  two  millions. 

16.  For  buying  and  selling  estates,  and  lending 
money  on  mortgage. 

IT.  For  carrying  on  an  undertaking  of  great 
advantage,  but  nobody  to  know  what  it  is. 

18.  For  paving  the  streets  of  London.  Capital, 
two  millions. 


THE   SOUTH   8EA   BUBBLE.  285 

19.  For  furnishing  funerals  to  any  part  of  Great 
Britain. 

20.  For  buying  and  selling  lands  and  lending 
money  at  interest.     Capital  five  millions. 

21.  For  carrying  on  the  royal  fishery  of  Great 
Britain.     Capital  ten  millions. 

22.  For  assuring  of  seamen's  wages. 

23.  For  erecting  loan  offices   for  the  assistance 
and  encouragement   of  the  industrious.      Capital, 
two  millions. 

24.  For  purchasing  and  improving  leasable  lands. 
Capital,  four  millions. 

25.  For  importing  pitch  and  tar,  and  other  naval 
stores,  from  North  Britain  and  America. 

26.  For  the  clothing,  felt  and  pantile  trade. 

27".  For  purchasing  and  improving  a  manor  and 
royalty  in  Essex. 

28.  For  insuring  of  horses.     Capital,  two  mil 
lions. 

29.  For  exporting  the  woollen  manufacture,  and 
importing  copper,  brass,  and  iron.     Capital,  four 
millions. 

30.  For  a  grand  dispensary.     Capital,  three  mil 
lions. 

31.  For  erecting  mills  and  purchasing  lead-mines. 
Capital,  two  millions. 

32.  For  improving  the  art  of  making  soap. 


THE   SOUTH   SEA   BUBBLE. 

33.  For  a  settlement  on  the  island  of  Santa  Cruz. 

34.  For  sinking  pits  and  smelting  lead  ore  in 
Derbyshire. 

35.  For  making  glass  bottles  and  other  glass. 

36.  For  a  wheel  for  perpetual  motion.     Capital, 
one  million. 

37.  For  improving  of  gardens. 

38.  For  insuring  and  increasing  children's  for 
tunes. 

39.  For  entering  and  loading  goods  at  the  Cus 
tom-house,  and  for  negotiating  business  for  mer 
chants. 

T 

40.  For  carrying  on  a  woollen  manufacture  in 
the  north  of  England. 

41.  For   importing  walnut-trees  from  Virginia. 
Capital,  two  millions. 

42.  For  making  Manchester  stuffs  of  thread  and 
cotton. 

43.  For  making  Joppa  and  Castile  soap. 

44.  For  improving  the  wrought-iron  and  steel 
manufactures  of  this  kingdom.     Capital,  four  mil 
lions. 

45.  For    dealing    in    lace,    hollands,    cambrics, 
lawns,  etc.     Capital,  two  millions. 

46.  For  trading  in  and  improving  certain  com 
modities   of    the   produce   of    this    kingdom,   etc. 
Capital,  three  millions. 


THE    SOUTH    SEA   BUBBLE.  287 

47.  For   supplying   the  London    markets    with 
cattle. 

48.  For   making    looking-glasses,   coach-glasses, 
etc.     Capital,  two  millions. 

49.  For  working  the  tin  and  lead  mines  in  Corn 
wall  and  Derbyshire. 

50.  For  making  rape-oil. 

51.  For  importing  beaver  fur.    .Capital,  two  mil 
lions. 

52.  For  making  pasteboard  and  packing-paper. 

53.  For  importing  of  oils  and   other  materials 
used  in  the  woollen  manufacture. 

54.  For  improving  and  increasing  the  silk  manu 
factures. 

55.  For  lending  money  on  stock,  annuities,  tal 
lies,  etc. 

56.  For  paying  pensions  to  widows  and  others, 
at  a  small  discount.     Capital,  two  millions. 

57.  For  improving  malt  liquors.     Capital,  four 
millions. 

58.  For  a  grand  American  fishery. 

59.  For  purchasing   and  improving   the   fenny 
lands  in  Lincolnshire.     Capital,  two  millions. 

60.  For  improving  the  paper  manufacture   of 
Great  Britain. 

61.  The  Bottomry  Company. 

62.  For  drying  malt  by  hot  air. 


288  THE   SOUTH    SEA   BUBBLE. 

63.  For  carrying  on  a  trade  in  the  river  Oro 
nooko. 

64.  For  the  more  effectual  making  of  baize,  in 
Colchester  and  other  parts  of  Great  Britain. 

65.  For  buying  of  naval  stores,  supplying  the 
victualling,  and  paying  the  -wages  of  the  workmen. 

66.  For  employing  poor  artificers,  and  furnishing 
merchants  and  others  with  watches. 

67.  For  improvement  of  tillage  and  the  breed  of 
cattle. 

68.  Another  for  the  improvement  of  our  breed 
in  horses. 

69.  Another  for  a  horse-insurance. 

70.  For  carrying   on   the   corn  trade  of  Great 
Britain. 

71.  For  insuring  to  all  masters  and  mistresses  the 
losses  they  may  sustain  by  servants.   Capital,  three 
millions. 

72.  For  erecting  houses  or  hospitals  for  taking  in 
and   maintaining  illegitimate   children.      Capital, 
two  millions. 

73.  For  bleaching  coarse  sugars,  without  the  use 
of  fire  or  loss  of  substance. 

74.  For  building  turnpikes  and  wharfs  in  Great 
Britain. 

75.  For  insuring  from  thefts  and  robberies. 

76.  For  extracting  silver  from  lead. 


THE    SOUTH    SEA   BUBBLE. 

77.  For  making  china  and  delf  ware.     Capital, 
one  million. 

78.  For   importing    tobacco,   and    exporting   it 
again  to  Sweden  and  the  north  of  Europe.     Capi 
tal,  four  millions. 

79.  For  making  iron  with  pit  coal. 

80.  For  furnishing  the   cities    of   London  and 
Westminster  with  hay  and  straw.     Capital,  three 
millions. 

81.  For  a  sail  and  packing-cloth  manufactory  in 
Ireland. 

82.  For  taking  tip  ballast. 

83.  For  buying  and  fitting  out  ships  to  suppress 
pirates. 

84.  For  the  importation  of  timber  from  "Wales. 
Capital,  two  millions. 

85.  For  rock-salt. 

86.  For  the  transmutation  of  quicksilver  into  a 
malleable  fine  metal. 

Besides  these  bubbles,  many  others  sprang  up 
daily,  in  spite  of  the  condemnation  of  the  govern 
ment  and  the  ridicule  of  the  still  sane  portion  of 
the  public.  The  print-shops  teemed  with  carica 
tures,  and  the  newspapers  with  epigrams  and 
satires,  upon  the  prevalent  folly.  An  ingenious 
cardmaker  published  a  pack  of  South-Sea  playing- 
cards,  which  are  now  extremely  rare,  each  card 

13 


290  THE   SOUTH   SEA  BUBBLE. 

containing,  besides  the  usual  figures  of  a  very  small 
size,  in  one  corner,  a  caricature  of  a  bubble  com 
pany,  with  appropriate  verses  underneath.  One  of 
the  most  famous  bubbles  was  "  Puckle's  Machine 
Company,"  for  discharging  round  and  square  can 
non-balls  and  bullets,  and  making  a  total  revolution 
in  the  art  of  war.  Its  pretensions  to  public  favor 
were  thus  summed  up  on  the  eight  of  spades : 

"  A  rare  invention  to  destroy  the  crowd 
Of  fools  at  home  instead  of  fools  abroad. 
Fear  not,  my  friends,  this  terrible  machine, 
They're  only  wounded  who  have  shares  therein." 

The  nine  of  hearts  was  a  caricature  of  the 
English  Copper  and  Brass  Company,  with  the 
folio  wing  epigram : 

"  The  headlong  fool  that  wants  to  be  a  swopper 
Of  gold  and  silver  coin  for  English  copper, 
May,  in  Change  Alley,  prove  himself  an  ass, 
And  give  rich  metal  for  adultrate  brass." 

ue  eight  of  diamonds  celebrated  the  company 
i  jr  the  colonization  of  Acadia,  with  this  doggerel : 

"  lie  that  is  rich,  and  wants  to  fool  away 
A  good  round  sum  in  North  America, 
Let  him  subscribe  himself  a  headlong  sharer, 
And  asses'  ears  shall  honor  him  or  bearer." 

And  in   a  similar  style   every  card   of  the  pack 


THE   SOUTH   SEA   BUBBLE.  291 

exposed  some  knavish  scheme,  and  ridiculed  the 
persons  who  were  its  dupes.  It  was  computed  that 
the  total  amount  of  the  sums  proposed  for  carrying 
on  these  projects  was  upwards  of  three  hundred 
millions  sterling. 

It  is  time,  however,  to  return  to  the  great  South 
Sea  gulf,  that  swallowed  the  fortunes  of  so  many 
thousands  of  the  avaricious  and  the  credulous.  On 
the  29th  of  May,  the  stock  had  risen  as  high  as  five 
hundred,  and  about  two-thirds  of  the  government 
annuitants  had  exchanged  the  securities  of  the 
state  for  those  of  the  South  Sea  Company.  During 
the  whole  of  the  month  of  May  the  stock  continued 
to  rise,  and  on  the  28th  it  was  quoted  at  five  hun 
dred  and  fifty.  In  four  days  after  this  it  took  a 
prodigious  leap,  rising  suddenly  from  five  hundred 
.and  fifty  to  eight  hundred  and  ninety.  It  was  now 
the  general  opinion  that  the  stock  could  rise  no 
higher,  and  many  persons  took  that  opportunity  of 
selling  out,  with  a  view  of  realizing  their  profits. 
Many  noblemen  and  persons  in  the  train  of  the 
king,  and  about  to  accompany  him  to  Hanover, 
were  also  anxious  to  sell  out.  So  many  sellers,  and 
so  few  buyers,  appeared  in  the  Alley  on  the  3d  of 
June,  that  the  stock  fell  at  once  from  eight  hundred 
and  ninety  to  six  hundred  and  forty.  The  directors 
were  alarmed,  and  gave  their  agents  orders  to  buy. 


292  THE    SOUTH    SEA   BUBBLE. 

Their  efforts  succeeded.  Toward  evening,  confi 
dence  was  restored,  and  the  stock  advanced  to 
seven  hundred  and  fifty.  It  continued  at  this 
price,  with  some  slight  fluctuation,  until  the  com 
pany  closed  their  books  on  the  22d  of  June. 

It  would  be  needless  and  uninteresting  to  detail 
the  various  arts  employed  by  the  directors  to  keep 
up  the  price  of  stock.  It  will  be  sufficient  to  state 
that  it  finally  rose  to  one  thousand  per  cent.  It 
was  quoted  at  this  price  in  the  commencement  of 
August.  The  bubble  was  then  full-blown,  and 
began  to  quiver  and  shake  preparatory  to  its 
bursting. — (NOTE  2.) 

Many  of  the  government  annuitants  expressed 
dissatisfaction  against  the  directors.  They  accused 
them  of  partiality  in  making  out  the  lists  for  shares 
in  each  subscription.  Further  uneasiness  was  occa 
sioned  by  its  being  generally  known  that  Sir  John 
Blunt,  the  chairman,  and  some  others,  had  s6ld  out. 
During  the  whole  of  the  month  of  August  the 
stock  fell,  and  on  the  2d  of  September  it  was  quoted 
at  seven  hundred  only. 

The  state  of  things  now  became  alarming.    .To 
prevent,  if  possible,  the  utter  extinction  of  public 
confidence  in  their  proceedings,  the  directors  sum  , 
moned  a  general  court  of  the  whole  corporation,  to 
meet  in  Merchant  Tailors'  Hall  on  the  8th  of  Sep  - 


THE. SOUTH    SEA   BUBBLE.  293 

tember.  "By  nine  o'clock  in  the  morning,  the  room 
was  filled  to  suffocation  ;  Cheapside  was  blocked 
up  by  a  crowd  unable  to  gain  admittance,  and 
the  greatest  excitement  prevailed.  The  direc 
tors  and  their  friends  mustered  in  great  numbers. 
Sir  John  Fellowes,  the  sub-governor,  was  called  to 
the  chair.  He  acquainted  the  assembly  with  the 
cause  of  their  meeting;  read  to  them  the  several 
resolutions  of  the  court  of  directors,  and  gave  them 
an  account  of  their  proceedings ;  of  the  taking  in 
the  redeemable  and  unredeemable  funds,  and  of 
the  subscriptions  in  money.  Mr.  Secretary  Craggs 
then  made  a  short  speech,  wherein  he  commended 
the  conduct  of  the  directors,  and  urged  that  nothing 
could  more  effectually  contribute  to  the  bringing 
this  scheme  to  perfection  than  union  among  them 
selves.  He  concluded  with  a  motion  for  thanking 
the  court  of  directors  for  their  prudent  and  skillful 
management,  and  for  desiring  them  to  proceed  in 
such  manner  as  they  should  think  most  proper  for 
the  interest  and  advantage  of  the  corporation.  Mr. 
Hungerford,  who  had  rendered  himself  very  con 
spicuous  in  the  House  of  Commons  for  his  zeal  in 
behalf  of  the  South  Sea  Company,  and  who  was 
shrewdly  suspected  to  have  been  a  considerable 
gainer  by  knowing  the  right  time  to  sell  out,  was 
very  magniloquent  on  this  occasion.  He  said  thai 


294:  THE   SOUTH   SEA  BUBBLE. 

he  had  seen  the  rise  and  fall,  the  decay  and  resur 
rection  of  many  communities  of  this  nature,  but 
that,  in  his  opinion,  none  had  ever  performed  such 
wonderful  things  in  so  short  a  time  as  the  South  Sea 
Company.  They  had  done  more  than  the  crown,  the 
pulpit,  or  the  bench  could  do.  They  had  reconciled 
all  parties  in  one  common  interest ;  they  had  laid 
asleep,  if  not  wholly  extinguished,  all  the  domestic 
jars  and  animosities  of  the  nation.  By  the  rise  of 
their  stock,  moneyed  men  had  vastly  increased 
their  fortunes;  country  gentlemen  had  seen  the 
value  of  their  lands  doubled  and  trebled  in  their 
hands.  They  had  at  the  same  time  done  good  to 
the  church,  not  a  few  of  the  reverend  clergy  having 
got  great  sums  by  the  project.  In  short,  they  had 
enriched  the  whole  nation,  and  he  hoped  they  had 
not  forgotten  themselves.  There  was  some  hissing 
at  the  latter  part  of  this  speech,  which,  for  the 
extravagance  of  its  eulogy,  was  not  far  removed 
from  satire ;  but  the  directors  and  their  friends,  and 
all  the  winners  in  the  room,  applauded  vehemently. 
The  Duke  of  Portland  spoke  in  a  similar  strain,  and 
expressed  his  great  wonder  why  anybody  should  be 
dissatisfied ;  of  course,  he  was  a  winner  by  his 
speculations,  and  in  a  condition  similar  to  that  of 
the  fat  alderman  in  Joe  Miller's  Jests,  who,  when 
ever  he  had  eaten  a  good  dinner,  folded  his  hands 


THE    SOUTH    SEA   BUBBLE.  295 

upon  his  paunch,  and  expressed  his  doubts  whether 
there  could  be  a  hungry  man  in  the  world. 

Several  resolutions  were  passed  at  this  meeting, 
but  they  had  no  effect  upon  the  public.     Upon  the 
very  same  evening  the  stock  fell  to  six  hundred  and 
forty,  and  on  the  morrow  to  five  hundred  and  forty. 
Day  after  day  it  continued  to  fall,  until  it  was  as 
low  as  four  hundred.     In  a  letter,  dated  September 
13th,  from  Mr.  Broderick,  M.P.,  to  Lord  Chancellor 
Middleton,  and  published  in  Coxe's  "  Walpole,"  the 
former  says:  "  Various  are  the  conjectures  why  the 
South  Sea  directors  have   suffered  the  cloud  to 
break  so  early.     I  made  no  doubt  but  they  would 
do  so  when  they  found  it  to  their  advantage.    They 
have  stretched  credit  so  far  beyond  what  it  would 
bear,  that  specie  proves  insufficient  to  support  it. 
Their    most    considerable  men    have   drawn  out, 
securing  themselves  by  the  losses  of  the  deluded, 
thoughtless  numbers,  whose  understandings  have 
been  overruled  by  avarice  and  the  hope  of  mak 
ing    mountains    out    of    mole-hills.       Thousands 
of   families  will    be    reduced   to    beggary.      The 
consternation    is  inexpressible — the    rage  beyond 
description,  and  the  case  altogether  so  desperate, 
that  I  do  not  see  any  plan  or  scheme  so  much  as 
thought  of  for  averting  the  blow ;  so  that  I  cannot 
pretend  to  guess  what  is  next  to  be  done."    Ten 


' 


THE    SOUTH    SEA    BUBBLE. 


days  afterward,  the  stock  still  falling,  he  writes: 
"  The  company  have  yet  come  to  no  determination, 
for  they  are  in  such  a  wood  that  they  know  not 
which  way  to  turn.  By  several  gentlemen  lately 
come  to  town,  I  perceive  the  very  name  of  a 
South  Sea-man  grows  abominable  in  every  country. 
A  great  many  goldsmiths  are  already  run  off,  and 
more  will,  daily.  I  question  whether  one-third,  nay, 
one-fourth  of  them  can  stand  it.  From  the  very 
beginning,  I  founded  my  judgment  of  the  whole 
affair  upon  the  unquestionable  maxim,  that  ten 
millions  (which  is  more  than  our  running  cash) 
could  not  circulate  two  hundred  millions  beyond 
which  our  paper  credit  extended.  That,  therefore, 
whenever  that  should  become  doubtful,  be  the  cause 
what  it  would,  our  noble  state-machine  must  inevit 
ably  fall  to  the  ground." 

On  the  12th  of  September,  at  the  earnest  solicita 
tion  of  Mr.  Secretary  Craggs,  several  conferences 
were  held  between  the  directors  of  the  South  Sea 
and  the  directors  of  the  Bank.     A  report  which 
was  circulated,  that  the  latter  had  agreed  to 
culate  six  millions  of  the  South  Sea  Compan 
bonds,  caused  the  stock  to  rise  to  six  hundred  and 


seventy;    but    in   the  afternoon,   as  soon   a 
report  was  known  to  be  groundless,  the  stoJlfell 
again  to  five,  hundred  and  eighty  ;  the*  nexl^fer  to 


THE    SOUTH    SEA   BUBBLE.  297 

five  hundred  and  seventy,  and  so  gradually'  to 
four  hundred.* 

The  ministry  were  seriously  alarmed  at  the  as 
pect  of  affairs.  The  directors  could  not  appear  in 
the  streets  without  being  insulted  ;  dangerous  riots 
were  every  moment  apprehended.  Dispatches  were 
sent  off  to  the  king  at  Hanover,  praying  his  imme 
diate  return.  Mr.  Walpole,  who  was  staying  at  his 
country  seat,  was  sent  for,  that  he  might  employ 
his  known  influence  with  the  directors  of  the  Bank 
of  England  to  induce  them  to  .accept  the  proposal 
made  by  the  South  Sea  Company  for  circulating  a 
number  of  their  bonds. 

The  Bank  was  very  unwilling  to  mix  itself  up 
with  the  affairs  of  the  company ;  it  dreaded  being 
involved  in  calamities  which  it  could  not  relieve, 
and  received  all  overtures  with  visible  reluctance. 
But  the  universal  voice  of  the  nation  called  upon  it 

*  Gay  (the  poet),  in  that  disastrous  year,  had  a  present  from 
young  Craggs  of  some  South  Sea  stock,  and  once  supposed  himself 
to  be  master  of  twenty  thousand  pounds.  His  friends  persuaded 
him  to  sell  his  share,  but  he  dreamed  of  dignity  and  splendor,  and 
could  not  bear  to  obstruct  his  own  fortune.  He  was  then  impor 
tuned  to  sell  as  much  as  would  purchase  a  hundred  a  year  for  life, 
"  which,"  says  Fenton,  "  will  make  you  sure  of  a  clean  shirt  and  a 
shoulder  of  mutton  every  day."  This  counsel  was  rejected ;  the 
profit  and  principal  were  lost,  and  Gay  sunk  under  the  calamity  so 
low  that  his  life  became  in  danger. — Johnson's  Lives  of  the  Poets. 

13* 


THE    SOUTH    SEA    BUBBLE. 

to  come  to  the  rescue.  Every  person  of  note  in 
commercial  politics  was  called  in  to  advise  in  the 
emergency.  A  rough  draft  of  a  contract  drawn  up 
by  Mr.  Walpole  was  ultimately  adopted  as  the 
basis  of  further  negotiations,  and  the  public  alarm 
abated  a  little. 

On  the  following  day,  the  20th  of  September,  a 
general  court  of  the  South  Sea  Company  was  held 
at  Merchant  Tailors'  Hall,  in  which  resolutions  were 
carried,  empowering  the  directors  to  agree  with  the 
Bank  of  England,  or  any  other  persons,  to  circulate 
the  company's  bonds,  or  make  any  other  agreement 
with  the  Bank  which  they  should  think  proper. 
One  of  the  speakers,  a  Mr.  Pulteney,  said  it  was 
most  surprising  to  see  the  extraordinary  panic  which 
had  seized  upon  the  people.  Men  were  running 
to  and  fro  in  alarm  and  terror,  their  imaginations 
filled  with  some  great  calamity,  the  form  and 
dimensions  of  which  nobody  knew : 

"  Black  it  stood  as  night- 
Fierce  as  ten  furies — terrible  as  hell." 

At  a  general  court  of  the  Bank  of  England,  held 
two  days  afterward,  the  governor  informed  them 
of  the  several  meetings  that  had  been  held  on  the 
affairs  of  the  South  Sea  Company,  adding  that  the 
directors  had  not  yet  thought  fit  to  come  to  any 


THE   SOUTH    SEA   BUBBLE.  299 

decision  upon  the  matter.  A  resolution  was  then 
proposed,  and  carried  without  a  dissentient  voice, 
empowering  the  directors  to  agree  with  those  of 
the  South  Sea  to  circulate  their  bonds,  to  what  sum, 
and  upon  what  terms,  and  for  what  time,  they 
might  think  proper. 

Thus  both  parties  were  at  liberty  to  act  as  they 
might  judge  best  for  the  public  interest.  Books 
were  opened  at  the  Bank  for  subscription  of  three 
millions  for  the  support  of  public  credit,  on  the 
usual  terms  of  £15  per  cent,  deposit,  £3  per  cent, 
premium,  and  £5  per  cent,  interest.  So  great  was 
the  concourse  of  people  in  the  early  part  of  the 
morning,  all  eagerly  bringing  their  money,  that  it 
was  thought  the  subscription  would  be  filled  that 
day  ;  but  before  noon  the  tide  turned.  In  spite  of 
all  that  could  be  done  to  prevent  it,  the  South  Sea 
company's  stock  fell  rapidly.  Their  bonds  were  in 
such  discredit,  that  a  run  commenced  upon  the 
most  eminent  goldsmiths  and  bankers,  some  of 
whom,  having  lent  out  great  sums  upon  South  Sea 
stock,  were  obliged  to  shut  up  their  shops  and 
abscond.  The  Sword-blade  company,  who  had 
hitherto  been  the  chief  cashers  of  the  South  Sea 
Company,  stopped  payment.  This  being  looked 
upon  as  but  the  beginning  of  evil,  occasioned  a 
great  run  upon  the  Bank,  who  were  now  obliged  to 


300  THE    SOUTH    SEA    BUBBLE. 

pay  out  money  much  faster  than  they  had  received 
it  upon  the  subscription  in  the  morning.  The  day 
succeeding  was  a  holiday  (the  29th  of  September), 
and  the  Bank  had  a  little  breathing  time.  They 
bore  up  against  the  storm  ;  but  their  former  rivals, 
the  South  Sea  Company,  were  wrecked  upon  it. 
Their  stock  fell  to  one  hundred  and  fifty,  and  gra 
dually,  after  various  fluctuations,  to  one  hundred 
and  thirty-five. 

The  Bank,  finding  they  were  not  able  to  restore 
public  confidence,  and  stem  the  tide  of  ruin,  with 
out  running  the  risk  of  being  swept  away  with 
those  they  intended  to  save,  declined  to  carry  out 
the  agreement  into  which  they  had  partially  entered. 
They  were  under  no  obligation  whatever  to  con 
tinue  ;  for  the  so-called  Bank  contract  was  nothing 
more  than  the  rough  draft  of  an  agreement,  in 
which  blanks  had  been  left  for  several  important 
particulars,  and  which  contained  no  penalty  for 
their  secession,  "^nd  thnsT"  to  nsp>  the  words  of 
Jhe  Parliamentary  History,  "were  seen,  in  the 
space  of  eight  months,  the*  rise,  progress,  and  fall 
of  that  mighty  fabric,  which  being  wound  up  by 
mysterious  springs  to  a  wonderful  height  had  fixed 
the  eyes  and  expectations  of  all  Europe,  but 
whose  foundation,  being  fraud,  illusion,  credu 
lity,  and  infatuation,  fell  to  the  ground  as  soon 


THE   SOUTH   SEA   BUBBLE.  301 

as  the  artful  management  of  its  directors  was  dis 
covered." 

In  the  hey-day  of  its  blood,  during  the  progress 
of  this  dangerous  delusion,  the  manners  of  the 
nation  became  sensibly  corrupted.  The  parliamen 
tary  inquiry,  set  on  foot  to  discover  the  delinquents, 
disclosed  scenes  of  infamy,  disgraceful  alike  to  the 
morals  of  the  offenders  and  the  intellects  of  the 
people  among  whom  they  had  arisen.  It  is  a  deeply 
interesting  study  to  investigate  all  the  evils  that 
were  the  result.  Nations,  like  individuals,  cannot 
become  desperate  gamblers  with  impunity.  Pun 
ishment  is  sure  to  overtake  them  sooner  or  later.  A 
celebrated  writer*  is  quite  wrong  when  he  says  "  that 
such  an  era  as  this  is  the  most  unfavorable  for  a 
historian  ;  that  no  reader  of  sentiment  and  imagina 
tion  can  be  entertained  or  interested  by  a  detail  of 
transactions  such  as  these,  which  admit  of  no 
warmth,  no  coloring,  no  embellishment;  a  detail  of 
which  only  serves  to  exhibit  an  inanimate  picture 
of  tasteless  vice  and  mean  degeneracy."  On  the 
contrary — and  Smollett  might  have  discovered  it, 
if  lie  had  been  in  the  -humor — the  subject  is  capa 
ble  of  inspiring  as  much  interest  as  even  a  novelisl 
can  desire.  Is  there  no  warmth  in  the  despair  of  a 

*  Smollett. 


302  THE   SOUTH    SEA  BUBBLE. 

plundered  people? — no  life  and  animation  in  the 
picture  which  might  be  drawn  of  the  woes  of  hun 
dreds  of  impoverished  and  ruined  families  ?  of  the 
wealthy  of  yesterday  become  the  beggars  of  to-day  ? 
of  the  powerful  and  influential  changed  into  exiles 
and  outcasts,  and  the  voice  of  self-reproach  and 
imprecation  resounding  from  every  corner  of  the 
land  ?  Is  it  a  dull  or  uninstructive  picture  to  see  a 
whole  people  shaking  suddenly  off  the  trammels  of 
reason,  and  running  wild  after  .  a  golden  vision, 
refusing  obstinately  to  believe  that  it  is  not  real, 
till,  like  a  deluded  hind  running  after  an  ignis  fa- 
tuus,  they  are  plunged  into  a  quagmire  ?  But  in 
this  false  spirit  has  history  too  often  been  written. 
The  intrigues  of  unworthy  courtiers  to  gain  the 
favor  of  still  more  unworthy  kings,  or  the  records 
of  murderous  battles  and  sieges,  have  been  dilated 
on,  and  told  over  and  over  again,  with  all  the  elo 
quence  of  style  and  all  the  charms  of  fancy ;  while 
the  circumstances  which  have  most  deeply  affected 
the  morals  and  welfare  of 'the  people  have  been 
passed  over  with  but  slight  notice,  as  dry  and  dull, 
and  capable  of  neither  warmth  nor  coloring. 

During  the  progress  of  this  famous  bubble,  Eng 
land  presented  a  singular  spectacle.  The  public 
mind  was  in  a  state  of  unwholesome  fermentation. 
Men  were  no  longer  satisfied  with  the  slow  but  sure 


THE    SOUTH    SEA   BUBBLE.  303 

profits  of  cautious  industry.  The  hope  of  bound 
less  wealth  for  the  morrow  made  them  heedless  and 
extravagant  for  to-day.  A  luxury,  till  then  unheard 
of,  was  introduced,  bringing  in  its  train  a  correspon 
ding  laxity  of  morals.  The  overbearing  insolence 
of  ignorant  men,  who  had  arisen  to  sudden  wealth 
by  successful  gambling,  made  men  of  true  gentility 
of  mind  and  manners  blush  that  gold  should  have 
power  to  raise  the  unworthy  in  the  scale  of  society. 
The  haughtiness  of  some  of  these  "  cyphering  cits," 
as  they  were  termed  by  Sir  Richard  Steele,  was 
remembered  against  them  in  the  day  of  their  adver 
sity.  In  the  parliamentary  inquiry,  many  of  the 
directors  suffered  more  for  their  insolence  than  for 
their  peculation.  One  of  them,  who,  in  the  full 
blown  pride  of  an  ignorant  rich  man,  had  said  that  lie 
would  feed  his  horse  upon  gold,  was  reduced  almost 
to  bread  and  water  for  himself;  every  haughty 
look,  every  overbearing  speech,  was  set  down,  and 
repaid  them  a  hundred  fold  in  poverty  and  humilia 
tion. — (NOTES  3,  4.) 

The  state  of  matters  all  over  the  country  was  so 
alarming,  that  George  I.  shortened  his  intended 
stay  in  Hanover,  and  returned  in  all  haste  to  Eng 
land.  He  arrived  on  the  llth  of  November,  and 
parliament  was  summoned  to  meet  on  the  8th  of 
December.  In  the  meantime,  public  meetings  were 


304  THE   SOUTH    SEA   BUBBLE. 

held  in  every  considerable  town  of  the  empire,  at 
which  petitions  were  adopted,  praying  the  ven 
geance  of  the  legislature  upon  the  South  Sea  direc 
tors,  who,  by  their  fraudulent  practices,  had  brought 

the  nation  to  the  brink  of  ™™      "N^fwl y  po»™H  to 

imagine  that  the  nation  itself  was  as  culpable  as  the 
South  Sea  Company.  Nobody  blamed  the  credu 
lity  and  avarice  of  the  people — the  degrading  lust 
of  gain,  which  had  swallowed  up  every  nobler 
quality  in  the  national  character,  or  the  infatuation 
which  had  made  the  multitude  run  their  heads 
with  such  frantic  eagerness  into  the  net  held  out  for 
them  by  scheming  projectors.  These  things  were 
never  mentioned.  The  people  were  a  simple, 
honest,  hard-working  people,  ruined  by  a  gang  of 
robbers,  who  were  to  be  hanged,  drawn,  and  quar 
tered  without  mercy. 

This  was  the  almost  unanimous  feeling  of  the 
country.  The  two  houses  of  parliament  were  not 
more  reasonable.  Before  the  guilt  of  the  South 
Sea  directors  was  known,  punishment  was  the  only 
cry.  The  king,  in  his  speech  from  the  throne,  ex 
pressed  his  hope  that  they  would  remember  that  all 
their  prudence,  temper,  and  resolution,  were  neces 
sary  to  find  out  and  apply  the  proper  remedy  for 
their  misfortunes.  In  the  debate  on  the  answer  to 
the  address,  several  speakers  indulged  in  the  most 


THE    SOUTH    SEA    BUBBLE.  305 

violent  invective*  against  the  directors  of  the  South 
Sea  project.  The  Lord  Molesworth  was  particu 
larly  vehement : 

"  It  had  been  said  by  some,  that  there  was  no  law 
to  punish  the  directors  of  the  South  Sea  Company, 
who  were  justly  looked  upon  as  the  authors  of  the 
present  misfortunes  of  the  state.  In  his  opinion, 
they  ought  upon  this  occasion  to  follow  the  example 
of  the  ancient  Romans,  who,  having  no  law  against 
parricide,  because  their  legislators  supposed  no  son 
could  be  so  unnaturally  wicked  as  to  imbrue  his 
hands  in  his  father's  blood,  made  a  law  to  punish 
this  heinous  crime  as  soon  as  it  was ,  committed. 
They  adjudged  the  guilty  wretch  to  be  sewn  in  a 
sack,  and  thrown  alive  into  the  Tiber.  He  looked 
upon  the  contrivers  and  executors  of  the  villainous 
South  Sea  scheme  as  the  parricides  of  their  coun 
try,  and  should  be  satisfied  to  see  them  tied  in  like 
manner  in  sacks,  and  thrown  into  the  Thames." 
Other  members  spoke  with  as  much  want  of  temper 
and  discretion.  Mr.  "Walpole  was  more  moderate. 
He  recommended  that  their  first  care  should  be  to 
restore  public  credit.  "  If  the  city  of  London  were 
on  fire,  all  wise  men  would  aid  in  extinguishing 
the  flames,  and  preventing  the  spread  of  the  con 
flagration,  before  they  inquired  after  the  incen 
diaries.  Public  credit  had  received  a  dangerous 


306 


THE   SOUTH   SEA   BUBBLE. 


wound,  and  lay  bleeding,  and  they  ought  to  apply 
a  speedy  remedy  to  it.  It  was  time  enough  to 
punish  the  assassin  afterward."  On  the  9th  of 
December,  an  address,  in  answer  to  his  majesty's 
speech,  was  agreed  upon,  after  an  amendment, 
which  was  carried  without  a  division,  that  words 
should  be  added  expressive  of  the  determination  of 
the  House  not  only  to  seek  a  remedy  for  the 
national  distresses,  but  to  punish  the  authors  of 
them. 

The  inquiry  proceeded  rapidly.  The  directors 
were  ordered  to  lay  before  the  House  a  full  account 
of  all  their  proceedings.  Resolutions  were  passed 
to  the  effect  that  the  calamity  was  mainly  owing  to 
the  vile  arts  of  stock-jobbers,  and  that  nothing 
could  tend  more  to  the  reestablishment  of  public 
credit  than  a  law  to  prevent  this  infamous  practice. 
Mr.  "Walpole  then  rose,  and  said,  that  "  as  he  had 
previously  hinted,  he  had  spent  some  time  upon  a 
scheme  for  restoring  public  credit,  but  that  the 
execution  of  it  depending  upon  a  position  which 
had  been  laid  down  as  fundamental,  he  thought  it 
proper,  before  he  opened  out  his  scheme,  to  be  in 
formed  whether  he  might  rely  upon  that  foundation. 
It  was,  whether  the  subscription  of  public  debts 
and  encumbrances,  money  subscriptions,  and  other 
contracts,  made  with  the  South  Sea  Company, 


THE   SOUTH    SEA   BUBBLE.  307 

should  remain  in  the  present  state  ?"  This  question 
occasioned  an  animated  debate.  It  was  finally 
agreed,  by  a  majority  of  259  against  117,  that  all 
these  contracts  should  remain  in  their  present  state, 
unless  altered  for  the  relief  of  the  proprietors  by  a 
general  court  of  the  South  Sea  Company,  or  set 
aside  by  due  course  of  law.  On  the  following  day, 
Mr.  Walpole  laid  before  a  committee  of  the  whole 
House  his  scheme  for  the  restoration  of  public 
credit,  which  was,  in  substance,  to  engraft  nine 
millions  of  South  Sea  stock  into  the  Bank  of  Eng 
land,  and  the  same  sum  into  the  East  India  Com 
pany  upon  certain  conditions.  The  plan  was 
favorably  received  by  the  House.  After  some  few 
objections,  it  was  ordered  that  proposals  should  be 
received  from  the  two  great  corporations.  They 
were  both  unwilling  to  lend  their  aid,  and  the  plan 
met  with  a  warm  but  fruitless  opposition  at  the 
general  courts  summoned  for  the  purpose  of  delibe 
rating  upon  it.  They,  however,  ultimately  agreed 
upon  the  terms  on  which  they  would  consent  to 
circulate  the  South  Sea  bonds,  and  their  report 
being  presented  to  the  committee,  a  bill  was 
brought  in  under  the  superintendence  of  Mr.  Wal 
pole,  and  safely  carried  through  both  Houses  of 
Parliament. 

A  bill  was  at  the  same  time  brought  in  for 


308  THE    SOUTH   SEA   BUBBLE. 

restraining  the  South  Sea  directors,  governor,  sub 
governor,  treasurer,  cashier,  and  clerks  from  leaving 
the  kingdom  for  a  twelvemonth,  and  for  discover 
ing  their  estates  and  effects,  and  preventing  them 
from  transporting  or  alienating  the  same.  All  the 
most  influential  members  of  the  House  supported 
the  bill.  Mr.  Shippen,  seeing  Mr.  Secretary  Craggs 
in  his  place,  and  believing  the  injurious  rumors 
that  were  afloat  of  that  minister's  conduct  in  the 
South  Sea  business,  determined  to  touch  him  to  the 
quick.  He  said  he  was  glad  to  see  a  British  House 
of  Commons  resuming  its  pristine  vigor  and  spirit, 
and  acting  with  so  much  unanimity  for  the  public 
good.  It  was  necessary  to  secure  the  persons  and 
estates  of  the  South  Sea  directors  and  their  officers ; 
"  but,"  he  added,  looking  fixedly  at  Mr.  Craggs  as 
he  spoke,  "  there  were  other  men  in  high  station, 
whom,  in  time,  he  would  not  be  afraid  to  name, 
who  were  no  less  guilty  than  the  directors."  Mr. 
Craggs  arose  in  great  wrath,  and  said,  that  if  the 
innuendo  were  directed  against  him,  he  was  ready 
to  give  satisfaction  to  any  man  who  questioned  him, 
either  in  the  House  or  out  of  it.  Loud  cries  of 
order  immediately  arose  on  every  side.  In  the 
midst  of  the  uproar,  Lord  Molesworth  got  up,  and 
expressed  his  wonder  at  the  boldness  of  Mr.  Craggs 
in  challenging  the  whole  House  of  Commons.  He, 


THE    SOUTH    SEA   BUBBLE.  309 

Lord  Molesworth,  though  somewhat  old,  past  sixty, 
would  answer  Mr.  Craggs  whatever  he  had  to  say 
in  the  House,  and  he  trusted  there  were  plenty  of 
young  men  beside  him,  who  would  not  be  afraid  to 
look  Mr.  Craggs  in  the  face  out  of  the  House.  The 
cries  of  order  again  resounded  from  every  side  ;  the 
members  arose  simultaneously ;  everybody  seemed 
to  be  vociferating  at  once.  The  Speaker  in  vain 
called  order.  The  confusion  lasted  several  minutes, 
during  which  Lord  Molesworth  and  Mr.  Craggs 
were  almost  the  only  members  who  kept  their  seats. 
At  last,  the  call  for  Mr.  Craggs  became  so  violent, 
that  he  thought  proper  to  submit  to  the  universal 
feeling  of  the  House,  and  explain  his  unparliamen 
tary  expression.  He  said,  that  by  giving  satisfac 
tion  to  the  impugners  of  his  conduct  in  that  House, 
he  did  not  mean  that  he  would  fight,  but  that  he 
would  explain  his  conduct.  Here  the  matter  ended, 
and  the  House  proceeded  to  debate  in  what  man 
ner  they  should  conduct  their  inquiry  into  the 
affairs  of  the  South  Sea  Company,  whether  in  a 
grand  or  a  select  committee.  Ultimately,  a  secret 
committee  of  thirteen  was  appointed,  with  power 
to  send  for  persons,  papers,  and  records. 

The  Lords  were  as  zealous  and  as  hasty  as  the 
Commons.  The  Bishop  of  Rochester  said  the 
scheme  had  been  like  a  pestilence.  The  Duke  of 


310  THE   SOUTH   SEA   BUBBLE. 

Wharton  said  the  House  ought  to  show  no  respect 
of  persons  ;  that,  for  his  part,  he  would  give  up  the 
dearest  friend  he  had,  if  he  had  been  engaged  in 
the  project.  The  nation  had  been  plundered  in  a 
most  shameful  and  flagrant  manner,  and  he  would 
go  as  far  as  anybody  in  the  punishment  of  the 
offenders.  Lord  Stanhope  said,  that  every  farthing 
possessed  by  the  criminals,  whether  directors  or  not 
directors,  ought  to  be  confiscated,  to  make  good  the 
public  losses. 

During  all  this  time  the  public  excitement  was 
extreme.  We  learn  from  Cox's  "  Walpole,"  that  the 
very  name  of  a  South  Sea  director  was  thought  to 
be  synonymous  with  every  species  of  fraud  and  vil 
lainy.  Petitions  from  counties,  cities,  and  boroughs, 
in  all  parts  of  the  kingdom,  were  presented,  crying 
for  the  justice  due  to  an  injured  nation  and  the 
punishment  of  the  villainous  peculators.  Those 
moderate  men,  who  would  not  go  to  extreme 
lengths,  even  in  the  punishment  of  the  guilty, 
were  accused  of  being  accomplices,  were  exposed 
to  repeated  insults  and  virulent  invectives,  and 
devoted,  both  in  anonymous  letters  and  public 
writings,  to  the  speedy  vengeance  of  an  injured 
people.  The  accusations  against  Mr.  Aislabie, 
ChaiiC^lor  of  the  Exchequer,  and  Mr.  Craggs 
another  member  of  the  ministry,  were  so  loud,  that 


THE  SOUTH   SEA  BUBBLE.  311 

> 

the  House  of  Lords  resolved  to  proceed  at  once  into 
the  investigation  concerning  them.  It  was  ordered, 
on  the  21st  of  January,  that  all  brokers  concerned 
in  the  South  Sea  scheme  should  lay  before  the 
House  an  account  of  the  stock  or  subscriptions 
bought  or  sold  by  them  for  any  of  the  officers  of 
the  Treasury  or  Exchequer,  or  in  trust  for  any  of 
them,  since  Michaelmas,  1719.  When  this  account 
was  delivered,  it  appeared  that  large  quantities  of 
stock  had  been  transferred  to  the  use  of  Mr.  Ais- 
labie.  Five  of  the  South  Sea  directors,  including 
Mr.  Edward  Gibbon,  the  grandfather  of  the  cele 
brated  historian,  were  ordered  into  the  custody  of 
the  black  rod.  Upon  a  motion  made  by  Earl  Stan 
hope,  it  was  unanimously  resolved,  that  the  taking 
in  or  giving  credit  for  stock  without  a  valuable  con 
sideration  actually  paid  or  sufficiently  secured,  or 
the  purchasing  stock  by  any  director  or  agent  of 
the  South  Sea  Company  for  the  use  or  benefit  of 
any  member  of  the  administration,  or  any  member 
of  either  house  of  Parliament,  during  such  time  as 
the  South  Sea  bill  was  yet  pending  in  Parliament, 
was  a  notorious  and  dangerous  corruption.  Another 
resolution  was  passed  a  few  days  afterward,  to  the 
effect  that  several  of  the  directors  and  officers  of 
the  company  having,  in  a  clandestine  manner, 
sold  their  own  stock  to  the  company,  had  been 


312  THE   SOUTH    SEA   BUBBLE. 

guilty  of  a  notorious  fraud  and  breach  of  trust,  and 
had  thereby  mainly  caused  the  unhappy  turn  of 
affairs  that  had  so  much  affected  public  credit. 
Mr.  Aislabie  resigned  his  office  as  Chancellor  of 
the  Exchequer,  and  absented  himself  from  parlia 
ment,  until  the  formal  inquiry  into  his  individual 
guilt  was  brought  under  the  consideration  of  the 
legislature. 

In  the  meantime,  Knight,  the  treasurer  of  the 
company,  and  who  was  intrusted  with  all  the  dan 
gerous  secrets  of  the  dishonest  directors,  packed 
up  his  books  and  documents  and  made  his  escape 
from  the  country.  He  embarked  in  disguise,  in  a 
small  boat  on  the  river,  and  proceeding  to  a  vessel 
hired  for  the  purpose,  was  safely  conveyed  to 
Calais.  The  Committee  of  Secrecy  informed  the 
House  of  the  circumstance,  when  it  was  resolved 
unanimously  that  two  addresses  should  be  presented 
to  the  king ;  the  first  praying  that  he  would  issue 
a  proclamation  offering  a  reward  for  the  apprehen 
sion  of  Knight ;  and  the  second,  that  he  would  give 
immediate  orders  to  stop  the  ports,  and  to  take 
effectual  care  of  the  coasts,  to  prevent  the  said 
Knight,  or  any  other  officers  of  the  South  Sea  Com 
pany,  from  escaping  out  of  the  kingdom.  The  ink 
was  hardly  dry  upon  these  addresses  before  they 
were  carried  to  the  king  by  Mr.  Methuen,  deputed 


THE   SOUTH   SEA   BUBBLE.  313 

by  the  House  for  that  purpose.  The  same  evening 
a  royal  proclamation  was  issued,  offering  a  reward 
of  two  thousand  pounds  for  the  apprehension  of 
Knight.  The  Commons  ordered  the  doors  of  the 
house  to  be  locked  and  the  keys  to  be  placed  on 
the  table.  General  Ross,  one  of  the  members  of 
the  Committee  of  Secrecy,  acquainted  them  that 
they  had  already  discovered  a  train  of  the  deepest 
villainy  and  fraud  that  hell  had  ever  contrived  to 
ruin  a  nation,  which  in  due  time  they  would  lay 
before  the  House.  In  the  meantime,  in  order  to  a 
further  discovery,  the  committee  thought  it  highly 
necessary  to  secure  the  persons  of  some  of  the  direc 
tors  and  principal  South  Sea  officers,  and  to  seize 
their  papers.  A  motion  to  this  effect  having  been 
made  was  carried  unanimously.  Sir  Robert  Chap 
lin,  Sir  Theodore  Janssen,  Mr.  Sawbridge,  and  Mr. 
F.  Eyles,  members  of  the  House,  and  directors  of 
the  South  Sea  Company,  were  summoned  to  appear 
in  their  places,  and  answer  for  their  corrupt  prac 
tices.  Sir  Theodore  Janssen  and  Mr.  Sawbridge 
answered  to  their  names,  and  endeavored  to  excul 
pate  themselves.  The  House  heard  them  patiently, 
and  then  ordered  them  to  withdraw.  A  motion 
was  then  made,  and  carried  nemine  contwacbicente, 
that  they  had  been  guilty  of  a  notorious  breach  of 
trust — had  occasioned  much  loss  to  great  numbers 

14 


314  THE   SOUTH   SEA   BUBBLE. 

of  his  majesty's  subjects,  and  had  highly  prejudiced 
the  public  credit.  It  was  then  ordered  that  for 
their  offence  they  should  be  expelled  the  House 
and  taken  into  the  custody  of  the  sergeant-at-arms. 
Sir  Robert  Chaplin  and  Mr.  Eyles,  attending  in 
their  places  four  days  afterward,  were  also  expelled 
the  House.  It  was  resolved  at  the  same  time  to 
address  the  king  to  give  directions  to  his  ministers 
at  foreign  courts  to  make  application  for  Knight, 
that  he  might  be  delivered  up  to  the  English  au 
thorities,  in  case  he  took  refuge  in  any  of  their  ' 
dominions.  The  king  at  once  agreed,  and  messen 
gers  were  dispatched  to  all  parts  of  the  continent 
the  same  night. 

Among  the  directors  taken  into  custody  was  Sir 
John  Blunt,  the  man  whom  popular  opinion  has 
generally  ;iccusu<l  of  having  bt-eii  the  original  au 
thor  and  father  of  the  scheme.  This  man,  we  are 
informed  by  Pope,  in  his  epistle  to  Allen  Lord 
Bathurst,  was  a  Dissenter,  of  a  most  religious  de 
portment,  and  professed  to  be  a  great  believer.* 

*  "  '  God  cannot  love,'  says  Blunt,  with  tearless  eyes, 

*  The  wretch  he  starves,'  and  piously  denies 

Much-injur'd  Blunt!  why  bears  he  Britain's  hate? 

A  wizard  told  him  in  these  words  our  fate  : 

*  At  length  corruption,  like  a  general  flood, 
So  long  by  watchful  ministers  withstood, 


THE   SOUTH   SEA   BUBBLE.  315 

He  constantly  declaimed  against  the  luxury  and 
corruption  of  the  age,  the  partiality  of  parliaments, 
and  the  misery  of  party-spirit.  He  was  particularly 
eloquent  against  avarice  in  great  and  noble  persons. 
He  was  originally  a  scrivener,  and  afterward  be 
came  not  only  a  director,  but  the  most  active  mana 
ger  of  the  South  Sea  Company.  "Whether  it  was 
during  his  career  in  this  capacity  that  he  first  began 
to  declaim  against  the  avarice  of  the  great,  we  are 
not  informed.  He  certainly  must  have  seen  enough 
of  it  to  justify  his  severest  anathema;  but  if  the 
preacher  had  himself  been  free  from  the  vice  he 
condemned,  his  declamations  would  have  had  a 
better  effect.  He  was  brought  up  in  custody  to 

Shall  deluge  all ;  and  avarice,  creeping  on, 

Spread  like  a  low  born  mist,  and  blot  the  sun ; 

Statesman  and  patriot  ply  alike  the  stocks, 

Peeress  and  butler  share  alike  the  box, 

And  judges  job,  and  bishops  bite  the  town, 

And  mighty  dukes  pack  cauds  for  half-a-crown : 

See  Britain  sunk  in  Lucre's  sordid  charms, 

And  France  revenged  on  Anne's  and  Edward's  arms !' 

'Twas  no  court-badge,  great  Scrivener!  fir'd  thy  brain, 

Nor  lordly  luxury,  nor  city  gain : 

No,  'twas  thy  righteous  end,  asham'd  to  see 

Senates  degen'rate,  patriots  disagree, 

And  nobly  wishing  party-rage  to  cease, 

To  buy  both  sides,  and  give  thy  country  peace." 

Pope's  Epistle  to  Allen  Lord  Bathurst. 


316  THE   SOUTH   SEA  BUBBLE. 

the  bar  of  the  House  of  Lords,  and  underwent  a 
long  examination.  He  refused  to  answer  several 
important  questions.  He  said  he  had  been  ex 
amined  already  by  a  committee  of  the  House  of 
Commons,  and  as  he  did  not  remember  his  answers 
and  might  contradict  himself,  he  refused  to  answer 
before  another  tribunal.  This  declaration,  in  itself 
an  indirect  proof  of  guilt,  occasioned  some  commo 
tion  in  the  House.  He  was  again  asked  peremp 
torily  whether  he  had  ever  sold  any  portion  of  the 
stock  to  any  member  of  the  administration,  or  any 
member  of  either  house  of  parliament,  to  facilitate 
the  passing  of  the  bill.  He  again  declined  to  an 
swer.  He  was  anxious,  he  said,  to  treat  the  House 
with  all  possible  respect,  but  he  thought  it  hard  to 
be  compelled  to  accuse,  himself.  After  several  in 
effectual  attempts  to  refresh  his  memory,  he  was 
directed  to  withdraw.  A  violent  discussion  ensued 
between  the  friends  and  opponents  of  the  ministry. 
It  was  asserted  that  the  administration  were  no 
strangers  to  the  convenient  taciturnity  of  Sir  John 
Blunt.  The  'Duke  of  Wharton  made  a  reflection 
upon  the  EarJ  Stanhope,  which  the  latter  warmly 
resented.  He  spoke  under  great  excitement,  and 
with  such  vehemence  as  to  cause  a  sudden  determi 
nation  of  blood  to  the  head.  He  felt  himself  so  ill 
that  he  was  obliged  to  leave  the  House  and  retire  to 


THE   SOUTH   SEA   BUBBLE.  317 

/ 

his  chamber.  He  was  cupped  immediately,  and 
also  let  blood  on  the  following  morning,  but  with 
slight  relief.  The  fatal  result  was  not  anticipated. 
;  Toward  evening  he  became  drowsy,  and  turning 
himself  on  his  face,  expired.  The  sudden  death  of 
this  statesman  caused  great  grief  to  the  nation. 
George  I.  was  exceedingly  affected,  and  shut  him 
self  up  for  some  hours  in  his  closet,  inconsolable  for 
his  loss. — (JSToTE  6.) 

Knight,  the  treasurer  of  the  company,  was  ap 
prehended  at  Tirlemont,  near  Liege,  by  one  of  the 
secretaries  of  Mr.  Leathes,  the  British  resident  at 
Brussels,  and  lodged  in  the  citadel  of  Antwerp. 
Repeated  applications  were  made  to  the  court  of 
Austria  to  deliver  him  up,  but  in  vain.  Knight 
threw  himself  upon  the  protection  of  the  states  of 
Brabant,  and  demanded  to  be  tried  in  that  country. 
It  was  a  privilege  granted  to  the  states  of  Brabant 
by  one  of  the  articles  of  the  Joyeuse  Entree,  that 
every  criminal  apprehended  in  that  country  should 
be  tried  in  that  country.  The  states  insisted  on 
their  privilege,  and  refused  to  deliver  Knight  to 
the  British  authorities.  The  latter  did  not  cease 
their  solicitations ;  but  in  the  meantime  Knight  es 
caped  from  the  citadel. 

On  the  16th  of  February,  the  Committee  of  Se 
crecy  made  their  first  report  to  the  House.  They 


318  THE   SOUTH   SEA   BUBBLE. 

stated  that  their  inquiry  had  been  attended  with 
numerous  difficulties  and  embarrassments;  every 
one  they  had  examined  had  endeavored,  as  far  as 
in  him  lay,  to  defeat  the  ends  of  justice.  In  some 
of  the  books  produced  before  them,  false  and  ficti 
tious  entries  had  been  made ;  in  others,  there  were 
entries  of  money  with  blanks  for  the  name  of  the 
stockholders.  There  were  frequent  erasures  and 
alterations,  and  in  some  of  the  books,  leaves  were 
torn  out.  They  also  found  that  some  books  of  great 
importance  had  been  destroyed  altogether,  and  that 
some  had  been  taken  away  or  secreted.  At  the 
very  entrance  into  their  inquiry,  they  had  observed 
that  the  matters  referred  to  them  were  of  great 
variety  and  extent.  Many  persons  had  been 
intrusted  with  various  parts  in  the  execution  of  the 
law,  and  under  color  thereof,  had  acted  in  an  un 
warrantable  manner,  in  disposing  of  the  properties 
of  many  thousands  of  persons,  amounting  to  many 
millions  of  money.  They  discovered  that,  before 
the  South  Sea  Act  was  passed,  there  was  an  entry 
in  the  company's  books  of  the  sum  of  £1,259,325, 
upon  account  of  stock  stated  to  have  been  sold  to 
the  amount  of  £574,500.  This  stock  was  all  fic 
titious,  and  had  been  disposed  of  with  a  view  to 
promote  the  passing  of  the  bill.  It  was  noted  as 
sold  on  various  days,  and  at  various  prices,  from 


THE   SOUTH   SEA  BUBBLE.  319 

150  to  325  per  cent.  Being  surprised  to  see  so 
large  an  account  disposed  of  at  a  time  when  the 
company  were  not  empowered  to  increase  their 
capital,  the  committee  determined  to  investigate 
most  carefully  the  whole  transaction.  The  gov 
ernor,  sub-governor,  and  several  -directors  were 
brought  before  them,  and  examined  rigidly.  They 
found  that,  at  the  time  these  entries  were  made,  the 
company  was  not  in  possession  of  such  a  quantity 
of  stock,  having  in  their  own  right  only  a  small 
quantity,  not  exceeding  thirty  thousand  pounds  at 
the  utmost.  Pursuing  the  inquiry,  they  found  that 
this  amount  of  stock  was  to  be  esteemed  as  taken  in 
or  holden  by  the  company  for  the  benefit  of  the 
pretended  purchasers,  although  no  mutual  agree 
ment  was  made  for  its  delivery  or  acceptance  at 
any  certain  time.  No  money  was  paid  down,  nor 
any  deposit  or  security  whatever  given  to  the  com 
pany  by  the  supposed  purchasers ;  so  that  if  the 
stock  had  fallen,  as  might  have  been  expected  had 
the  act  not  passed,  they  would  have  sustained  no 
loss.  If,  on  the  contrary,  the  price  of  stock  ad 
vanced  (as  it  actually  did,  by  the  success  of  the 
scheme),  the  difference  by  the  advanced  price  was 
to  be  made  good  to  them.  Accordingly,  after  the 
passing  of  the  act,  the  account  of  stock  was  made 
up  and  adjusted  with  Mr.  Knight,  and  the  pre- 


THE   SOUTH   SEA   BUBBLE. 

tended  purchasers  were  paid  the  difference  out  of 
the  company's  cash.  This  fictitious  stock,  which 
had  been  chiefly  at  the  disposal  of  Sir  John  Blunt, 
Mr.  Gibbon,  and  Mr.  Knight,  was  distributed 
among  several  members  of  the  government  and 
their  connections,  by  way  of  bribe,  to  facilitate  the 
passing  of  the  bill.  To  the  Earl  of  Sunderland  was 
assigned  £50,000  of  this  stock ;  to  the  Duchess  of 
Kendal,  £10,000;  to  the  Countess  6f  Platen, 
$10,000 ;  to  her  two  nieces,  £10,000 ;  to  Mr.  Secre 
tary  Craggs,  £30,000;  to  Mr.  Charles  Stanhope 
(one  of  the  secretaries  of  the  Treasury),  £10,000 ;  to 
the  Sword-blade  company,  £50,000.  It  also  ap 
peared  that  Mr.  Stanhope  had  received  the  enor 
mous  sum  of  £250,000  as  the  difference  in  the  price 
of  some  stock,  through  the  hands  of  Turner,  Cas- 
wall  and  Co.,  but  that  his  name  had  been  partly 
erased  from  their  books,  and  altered  to  Stangape. 
Aislabie,  the  Chancellor  of  the  Exchequer,  had 
made  profits  still  more  abominable.  He  had  an 
account  with  the  same  firm,  who  were  also  South 
Sea  directors,  to  the  amount  of  £794,451.  He  had, 
besides,  advised  the  company  to  make  their  second 
subscription  one  million  and  a  half,  instead  of  a 
million,  by  their  own  authority,  and  without  any 
warrant.  The  third  subscription  had  been  con 
ducted  in  a  manner  as  disgraceful.  Mr.  Aislabie's 


THE   SOUTH    SEA   BUBBLE.  321 

name  was  down  for  £70,000 ;  Mr.  Craggs,  senior, 
for  £659,000 ;  the  Earl  of  Sunderland's  for  £160,000 ; 
and  Mr.  Stanhope  for  £47,000.  This  report  was 
succeeded  by  six  others,  less  important.  At  the 
end  of  the  last,  the  committee  declared  that  the 
absence  of  Knight,  who  had  been  principally  in 
trusted,  prevented  them  from  carrying  on  their 
inquiries. 

The  first  report  was  ordered  to  be  printed,  and 
taken  into  consideration  on  the  next  day  but  one, 
succeeding.  After  a  very  angry  and  animated 
debate,  a  series  of  resolutions  were  agreed  to,  con 
demnatory  of  the  conduct  of  the  directors,  of  the 
members  of  parliament,  and  of  the  administration 
concerned  with  them ;  and  declaring  that  they 
ought,  each  and  all,  to  make  satisfaction  out  of  their 
own  estates  for  the  injury  they  had  done  the  public. 
Their  practices  were  declared  to  be  corrupt,  in 
famous,  and  dangerous ;  and  a  bill  was  ordered  to 
,be  brought  in  for  the  relief  of  the  unhappy  suf 
ferers. 

Mr.  Charles  Stanhope  was  the  first  person 
brought  to  account  for  his  share  in  these  trans 
actions.  He  urged  in  his  defence  that,  for  some 
years  past,  he  had  lodged  all  the  money  he  was 
possessed  of  in  Mr.  Knight's  hands,  and  whatever 
stock  Mr.  Knight  had  taken  in  for  him,  he  had  paid 

U* 


322  THE   SOUTH   SEA   BUBBLE. 

a  valuable  consideration  for  it.  As  for  the  stock 
that  had  been  bought  for  him  by  Turner,  Caswall, 
and  Co.,  he  knew  nothing  about  it.  "Whatever 
had  been  done  in  that  matter  was  done  without  his 
authority,  and  he  could  not  be  responsible  for  it. 
Turner  and  Co.  took  the  latter  charge  upon  them 
selves  ;  but  it  was  notorious  to  every  unbiased  and 
unprincipled  person  that  Mr.  Stanhope  was  a  gainer 
of  the  £250,000  which  lay  in  the  hands  of  that  firm 
to  his  credit.  He  was,  however,  acquitted  by  a 
majority  of  three  only.  The  greatest  exertions  were 
made  to  screen  him.  Lord  Stanhope,  the  son  of  the 
Earl  of  Chesterfield,  went  round  to  the  wavering 
members,  using  all  the  eloquence  he  was  possessed  of 
to  induce  them  either  to  vote  for  the  acquittal,  or  to 
absent  themselves  from  the  House.  Many  weak- 
headed,  country  gentlemen  were  led  astray  by  his 
persuasions,  and  the  result  was  as  already  stated. 
The  acquittal  caused  the  greatest  discontent  through 
out  the  country.  Mobs  of  a  menacing  character 
assembled  in  different  parts  of  London;  fears  of 
riots  were  generally  entertained,  especially  as  the 
examination  of  a  still  greater  delinquent  was  ex 
pected  by  many  to  have  a  similar  termination. 
Mr.  Aislabie,  whose  high  office  and  deep  respon 
sibilities  should  have  kept  him  honest,  even  had 
native  principle  been  insufficient,  was  very  justly 


THE    SOUTH   SEA   BUBBLE.  323 

regarded  as,  perhaps,  the  greatest  criminal  of  all. 
His  case  was  entered  into  on  the  day  succeeding 
the  acquittal  of  Mr.  Stanhope.  Great  excitement 
prevailed,  and  the  lobbies  and  avenues  of  the 
House  were  beset  by  crowds  impatient  to  know  the 
result.  The  debate  lasted  the  whole  day.  Mr. 
Aislabie  found  few  Mends  :  his  guilt  was  so  appa 
rent  and  so  heinous,  that  nobody  had  courage  to 
stand  up  in  his  favor.  It  was  finally  resolved, 
without  a  dissentient  voice,  that  Mr.  Aislabie  had 
encouraged  and  promoted  the  destructive  execution 
of  the  South  Sea  scheme,  with  a  view  to  his  own 
exorbitant  profit,  and  had  combined  with  the 
directors  in  their  pernicious  practices,  to  the  ruin 
of  the  public  trade  and  credit  of  the  kingdom :  that 
he  should,  for  his  offences,  be  ignominiously  ex 
pelled  from  the  House  of  Commons,  and  committed 
a  close  prisoner  to  the  Tower  of  London ;  that  he 
should  be  restrained  from  going  out  of  the  kingdom 
for  a  whole  year,  or  till  the  end  of  the  next  session 
of  parliament ;  and  that  he  should  make  out  a  cor 
rect  account  of  all  his  estate,  in  order  that  it  might 
be  applied  to  the  relief  of  those  who  had  suffered 
by  his  mal-practices. 

This  verdict  caused  the  greatest  joy.  Though  it 
was  delivered  at  half-past  twelve  at  night,  it  soon 
spread  over  the  city.  Several  persons  illuminated 


324  THE   SOUTH    SEA   BtTBBLE." 

their  houses  in  token  of  their  joy.  On  the  follow 
ing  day,  when  Mr.  Aislabie  was  conveyed  to  the 
Tower,  the  mob  assembled  on  Tower  Hill  with  the 
intention  of  hooting  and  pelting  him.  Not  suc 
ceeding  in  this,  they  kindled  a  large  bonfire,  and 
danced  around  it  in  the  exuberance  of  their  delight. 
Several  bonfires  were  made  in  other  places ;  Lon 
don  presented  the  appearance  of  a  holiday,  and 
people  congratulated  one  another  as  if  they  had 
just  escaped  from  some  great  calamity.  The  rage 
upon  the  acquittal  of  Mr.  Stanhope  had  grown  to 
such  a  height,  that  none  could  tell  where  it  would 
have  ended  had  Mr.  Aislabie  met  with  the  like  in 
dulgence. 

To  increase  the  public  satisfaction,  Sir  George 
Caswall,  of  the  firm  of  Turner,  Caswall  &  Co.,  was 
expelled  from  the  House  on  the  following  day,  com 
mitted  to  the  Tower,  and  ordered  to  refund  the  sum 
of  £250,000. 

That  part  of  the  report  of  the  Committee  of  Se 
crecy  which  related  to  the  Earl  of  Sunderland  was 
next  taken  into  consideration.  Every  effort  waa 
made  to  clear  his  lordship  from  the  imputation. 
As  the  case  against  him  rested  chiefly  on  the  evi 
dence  extorted  from  Sir  John  Blunt,  great  pains 
were  taken  to  make  it  appear  that  Sir  John's  word 
was  not  to  be  believed,  especially  in  a  matter 


THE   SOUTH   SEA   BUBBLE.  325 

affecting  the  honor  of  a  peer  and  privy  councillor. 
All  the  friends  of  the  ministry  rallied  around  the 
earl,  it  being  generally  reported  that  a  verdict  of 
guilty  against  him  would  bring  a  Tory  ministry  into 
power.  He  was  eventually  acquitted  by  a  majority 
of  233  against  172  ;  but  the  country  was  convinced 
of  his  guilt.  The  greatest  indignation  was  every 
where  expressed,  and  menacing  mobs  again  assem 
bled  in  London.  Happily,  no  disturbance  took  place. 
This  was  the  day  on  which  Mr.  Craggs  the  elder 
expired.  The  morrow  had  been  appointed  for  the 
consideration  of  his  case.  It  was  very  generally 
believed  that  he  had  poisoned  himself.  It  appeared, 
however,  that  grief  for  the  loss  of  his  son,  one  of 
the  secretaries  of  the  Treasury,  who  had  died  five 
weeks  previously  of  the  smallpox,  preyed  much  on 
his  mind.  For  this  son,  dearly  beloved,  he  had 
been  amassing  vast  heaps  of  riches :  he  had  been 
getting  money,  but  not  honestly  ;  and  he  for  whose 
sake  he  had  bartered  his  honor  and  sullied  his  fame 
was  now  no  more.  The  dread  of  further  exposure 
increased  his  trouble  of  mind,  and  ultimately 
brought  on  an  apoplectic  fit,  in  which  he  expr/tred. 
He  left  a  fortune  of  a  million  and  a  half,  which  was 
afterward  confiscated  for  the  benefit  of  the  sufferers 
by  the  unhappy  delusion  he  had  been  so  mainly 
instrumental  in  raising. 


326  THE   SOUTH   SEA  BUBBLE. 

One  by  one  the  case  of  every  director  of  the 
company  was  taken  into  consideration,  A  sum 
amounting  to  two  millions  and  fourteen  thousand 
pounds  was  confiscated  from  their  estates  towards 
repairing  the  mischief  they  had  done,  each  man 
being  allowed  a  certain  residue  in  proportion  to  his 
conduct  and  circumstances,  ^  with  which  he  might 
begin  the  world  anew.  Sir  John  Blunt  was  only 
allowed  £5,000  out  of  his  fortune  of  upward  of 
£183,000 ;  Sir  John  Fellows  was  allowed  £10,000 
out  of  £243,000 ;  Sir  Theodore  Janssen,  £50,000  out 
of  £243,000  ;  Mr.  Edward  Gibbon,  £10,000  out  of 
£106,000  ;  Sir  John'  Lambert,  £5,000  out  of  £72, 
000.  Others,  less  deeply  involved,  were  treated 
with  greater  liberality.  Gibbon,  the  historian, 
whose  grandfather  was  the  Mr.  Edward  Gibbon  so 
severely  mulcted,  has  given,  in  the  "  Memoirs  of 
his  Life  and  Writings,"  an  interesting  account  of 
the  proceedings  in  Parliament  at  this  time.  He 
owns  that  he  is  not  an  unprejudiced  witness  ;  but, 
as  all  the  writers  from  which  it  is  possible  to  ex 
tract  any  notice  of  the  proceedings  of  these  disas 
trous  years  were  prejudiced  on  the  other  side,  the 
statements  of  the  great  historian  become  of  addi 
tional  value.  If  only  on  the  principle  of  audfy 
altcram  partem,  his  opinion  is  entitled  to  considera 
tion.  "  In  the  year  1716,"  he  says,  "  my  grand- 


THE    SOUTH    SEA   BUBBLE.  327 

father  was  elected  one  of  the  directors  of  the  South 
Sea  Company,  and  his  books  exhibited  the  proof 
that  before  his  acceptance  of  that  fatal  office,  he 
had  acquired  an  independent  fortune  of  £60,000. 
But  his  fortune  was  overwhelmed  in  the  shipwreck 
of  the  year  1720  and  the  labors  of  thirty  years 
were  blasted  in  a  single  day.  Of  the  use  or  abuse 
of  the  South  Sea  scheme,  of  the  guilt  or  innocence 
of  my  grandfather  and  his  brother  directors,  I  am 
neither  a  competent  nor  a  disinterested  judge.  Yet 
the  equity  of  modern  times  must  condemn  the 
violent  and  arbitrary  proceedings,  which  would  have 
disgraced  the  cause  of  justice,  and  rendered  injus 
tice  still  more  odious.  No  .sooner  had  the  nation 
awakened  from  its  golden  dream,  than  a  popular 
and  even  a  parliamentary  clamour  demanded  its 
victims ;  but  it  was  acknowledged  on  all  sides,  that 
the  directors,  however  guilty,  could  not  be  touched 
by  any  known  laws  of  the  land.  The  intemperate 
notions  of  Lord  Molesworth  were  not  literally  acted 
on ;  but  a  bill  of  pains  and  penalties  was  introduced 
— a  retroactive  statute,  to  punish  the  offences  which 
did  not  exist  at  the  time  they  were  committed. 
The  legislature  restrained  the  persons  of  the  direct 
ors,  imposed  an  exorbitant  security  for, their  appear 
ance,  and  marked  their  character  with  a  previous 
note  of  ignominy.  They  were  compelled  to  deliver, 


328  THE    SOUTH    SEA   BUBBLE. 

upon  oath,  the  strict  value  of  their  estates,  and  were 
disabled  from  making  any  transfer  or  alienation  of 
any  part  of  their  property.  Against  a  bill  of  pains 
and  penalties,  it  is  the  common  right  of  every  sub 
ject  to  be  heard  by  his  counsel  at  the  bar.  They 
prayed  to  be  heard.  Their  prayers  were  refused, 
and  their  oppressors,  who  required  no  evidence, 
would  listen  to  no  defence.  It  had  been  at  first 
proposed,  that  one-eighth  of  their  respective  estates 
should  be  allowed  for  the  future  support  of  the 
directors ;  but  it  was  especially  urged  that,  in  the 
various  shades  of  opulence  and  guilt,  such  a  pro 
portion  would  be  too  light  for  many,  and  for  some 
might  possibly  be  too  heavy.  The  character  and 
conduct  of  each  man  were  separately  weighed ;  but, 
instead  of  the  calm  solemnity  of  a  judicial  inquiry, 
the  fortune  and  honor  of  thirty-three  Englishmen 
were  made  the  topics  of  hasty  conversation,  the 
sport  of  a  lawless  majority ;  and  the  basest  member 
of  the  committee,  by  a  malicious  word  or  a  silent 
vote,  might  indulge  his  general  spleen,  or  personal 
animosity.  Injury  was  aggravated  by  insult,  and 
insult  was  embittered  by  pleasantry.  Allowances 
of  £20  or  Is.  were  facetiously  moved.  A  vague  re 
port  that  a  director  had  formerly  been  concerned  in 
another  project,  by  which  some  unknown  persons 
had  lost  their  money,  was  admitted  as  a  proof  of  his 


THE   SOUTH   SEA   BUBBLE.  329 

actual  guilt.  One  man  was  ruined  because  he  had 
dropped  a  foolish  speech,  that  his  horses  should  feed 
upon  gold;  another,  because  he  was  grown  so 
proud,  that  one  day,  at  the  treasury,  he  had  refused 
a  civil  answer  to  persons  much  above  him.  All 
were  condemned,  absent  and  unheard,  in  arbitrary 
lines  and  forfeitures,  which  swept  away  the  greatest 
part  of  their  substance.  Such  bold  oppression  can 
scarcely  be  shielded  by  the  omnipotence  of  parlia 
ment.  My  grandfather  could  not  expect  to  be 
treated  with  more  lenity  than  his  companions.  His 
Tory  principles  and  connections  rendered  him  ob 
noxious  to  the  ruling  powers.  His  name  was  re 
ported  in  a  suspicious  secret.  His  well-known 
abilities  could  not  plead  the  excuse  of  ignorance  or 
error.  In  the  first  proceedings  against  the  South 
Sea  directors,  Mr.  Gibbon  was  one  of  the  first  taken 
into  custody,  and  in  the  final  sentence  the  measure 
of  his  fine  proclaimed  him  eminently  guilty.  The 
total  estimate,  which  he  delivered  on  oath  to  the 
House  of  Commons,  amounted  to  £106,543  5s.  6d., 
exclusive  of  antecedent  settlements.  Two  different 
allowances  of  £15,000  and  of  £10,000  were  moved 
for  Mr.  Gibbon ;  but,  on  the  question  being  put,  it 
was  carried  without  a  division  for  the  smaller  sum. 
On  these'  ruins,  with  the  skill  and  credit  of  which 
parliament  had  not  been  able  to  despoil  him,  my 


330  THE   SOUTH   SEA   BUBBLE. 

grandfather,  at  a  mature  age,  erected  the  edifice  of 
a  new  fortune.  The  labors  of  sixteen  years  were 
amply  rewarded ;  and  I  have  reason  to  believe  that 
the  second  structure  was  not  much  inferior  to  the 
first." 

The  next  consideration  of  the  legislature,  after  the 
punishment  of  the  directors,  was  to  restore  public 
credit.  ^The  scheme  of  "Walpole  had  been  found  in 
sufficient,  and  had  fallen  into  disrepute.  A  compu 
tation  was  made  of  the  whole  capital  stock  of  the 
South  Sea  Company  at  the  end  of  the  year  1720. 
It  was  found  to  amount  to  thirty-seven  millions 
eight  hundred  thousand  pounds,  of  which  the  stock 
allotted  to  all  the  proprietors  only  amounted  to 
twenty-four  millions  five  hundred  thousand  pounds. 
The  remainder  of  thirteen  millions  three  hundred 
thousand  pounds  belonged  to  the  company  in  their 
'  corporate  capacity,  and  was  the  profit  they  had 
made  by  the  national  delusion.  Upwards  of  eight 
millions  of  this  were  taken  from  the  company,  and 
divided  among  the  proprietors  and  subscribers 
generally,  making  a  dividend  of  about  £33  6s.  Sd. 
per  cent.  This  was  a  great  relief.  It  was  further 
ordered,  that  such  persons  as  had  borrowed  money 
from  the  South  Sea  Company  upon  stock  actually 
transferred  and  pledged  at  the  time  of  borrowiAg  to 
or  for  the  use  of  the  company,  should  be  free  from 


THE   SOUTH   SEA   BUBBLE.  331 

all  demands,  upon  payment  of  ten  per  cent,  of  the 
sums  so  borrowed.  They  had  lent  about  eleven 
millions  in  this  manner,  at  a  time  when  prices  were 
unnaturally  raised;  and  they  now  received  back 
one  million  one  hundred  thousand,  when  prices  had 
sunk  to  their  ordinary  level. 

But  it  was'  a  long  time  before  public  credit  was 
thoroughly  restored.  Enterprise,  like  Icarus,  had 
soared  too  high,  and  melted  the  wax  of  her  wings ; 
lift  Icarus,  she  had  fallen  into  a  sea,  and  learned, 
wftle  floundering  in  its  waves,  that  her  proper  ele- 
mlht  was  the  solid  ground.  She  has  never  since 
ittempted  so  high  a  flight. 

In  times  of  great  commercial  prosperity  there 
has  been  a  tendency  to  over-speculation  on  several 
occasions  since  then.  The  success  of  one  project 
generally  produces  others  of  a  similar  kind.  Popu 
lar  imitativeness  will  always,  in  a  trading  nation, 
seize  hold  of  such  successes,  and  drag  a  community 
too  anxious  for  profits  into  an  abyss  from  which 
extrication  is  difficult.  Bubble  companies,  of  a  kind 
similar  to  those  engendered  by  the  South  Sea  pro 
ject,  lived  their  little  day  in  the  famous  year  of  the 
panic,  1825.  On  that  occasion,  as  in  1720,  knavery 
gathered  a  rich  harvest  from  cupidity,  but  both 
suffered  when  the  day  of  reckoning  came.  The 
schemes  of  the  year  1836  threatened,  at  one  time, 


THE   SOUTH   SEA   BUBBLE. 

results  as  disastrous ;  but  they  were  happily  averted 
before  it  was  too  late.* 

*  The  South  Sea  project  remained  until  1845  the  greatest  ex 
ample  in  British  history  of  the  infatuation  of  the  people  for  com 
mercial  gambling. 


NOTES  TO  SOUTH  SEA  BUBBLE. 

"  The  South  Sea  Bubble  now  appears, 
Which  caused  some  smiles,  some  countless  tears, 
And  set  half  Europe  by  the  ears." 

(1.)  BLUNT,  the  projector,  had  taken  the  hint  of 
his  plan  from  the  famous  Mississippi  scheme  formed 
by  Law,  which  in  the  preceding  year  had  raised 
such  a  ferment  in  France,  and  entailed  ruin  upon 
many  thousand  families  of  that  kingdom.  In  the 
scheme  of  Law  there  was  something  substantial. 
An  exclusive  trade  to  Louisiana  promised  some 
advantage ;  though  the  design  was  defeated  by  the 
frantic  eagerness  of  the  people.  Law  himself  be 
came  the  dupe  of  the  regent,  who  transferred  the 
burden  of  1,500,000,000  of  the  king's  debts  to  the 
shoulders  of  the  subjects;  while  the  projector  was 
sacrificed  as  the  scapegoat  of  the  political  iniquity. 
The  South  Sea  scheme  promised  no  commercial 
advantage  of  any  consequence.  It  was  buoyed  up 
by  nothing  but  the  folly  and  rapaciousness  of  indi 
viduals,  which  became  so  blind  and  extravagant, 


334:  THE   SOUTH    SEA   BUBBLE. 

that  Blunt,  with  moderate  talents,  was  able  to 
impose  upon  the  whole  nation,  and  make  tools  of 
other  directors/*— SMOLLETT. 

(2.)  All  distinction  of  party,  religion,  sex,  charac 
ter  and  circumstances,  were  swallowed  up  in  this 
universal  concern,  or  in  some  such  pecuniary  pro 
ject.  Exchange  Alley  was  filled  with  a  strange  con 
course  of  statesmen  and  clergymen,  churchmen  and 
dissenters,  whigs  and  tories,  physicians,  lawyers, 
tradesmen  and  even  with  multitudes  of  females. 
All  other  professions  and  employments  were  utterly 
neglected;  and  the  people's  attention  wholly  en 
grossed  by  this  and  other  chimerical  schemes, 
which  were  known  by  the  denomination  of  bub 
bles. — Hid. 

(3.)  Men  of  good  estate  sold  house  and  land  in 
order  to  become  great  shareholders ;  merchants  of 
eminence  neglected  their  established  traffic  to  reap 
50  per  cent,  of  profit ;  and  the  whole  nation  became 
intoxicated  with  percentages,  dividends  and  trans 
fers.  .  .  .  .  '.  Subscription  succeeded  sub 
scription,  each  mounting  above  the  other  till  the 
stock  rose  to  above  a  thousand  per  cent.  And  the 
insolence  of  the  Governor  and  Directors  rose  in 
proportion  until  it  was  said,  "  We  have  made  them 


NOTES.  335 

• 

kings  and  they  deal  with  everybody  as  such." — 
CIVIL  TRANSACTIONS,  1720. 

(4.)  "  To  speak  in  a  gaming  style,"  said  a  sober 
financier  of  the  day,  "  the  South  Sea  stock  must  be 
allowed  the  honor  of  being  the  gold  table  ;  the  bet 
ter  sort  of  these  bubbles,  the  silver  tables  ;  and  the 
lower  sort,  the  farthing  tables  .for  the  footmen." 
But  every  day  brought  forth  a  new  project  till  all 
trade  was  suspended  save  this  gambling  in  shares- 
till  Change  Alley  was  crammed  from  morning  till 
night  with  dukes,  lords,  country  squires,  parsons, 
dissenting  ministers,  brokers  and  jobbers,  aad  men 
of  every  possible  color  and  description — nay,  the 
very  ladies  appeared  there  at  times  in  their  eager 
ness  to  transact  their  own  business. — Pict.  History 
of  England. 

(5.)  So  general  had  been  the  gambling,  that  one 
who  took  the  pains  to  count  the  exceptions  among 
ministers  and  noblemen  of  highest  rank,  could  only 
name  Lord  Stanhope  and  the  Dukes  of  Argyle  and 
Eoxburgh  as  not  having  been  "in  the  stocks." 
Walpole,  notwithstanding  his  denouncement  of  the 
scheme,  had  been  deeply  in  it,  and  had  been  a  great 
gainer  by  it,  having  sold  out  at  the  highest  price, 
leaving  his  wife  to  speculate  on  her  own  account.— 
lUd. 


336  THE   SOUTH    SEA   BUBBLE. 

• 

(6.)  It  was  said  and  believed  that  Ms  majesty 
and  his  ill-favored  German  mistresses,  by  buying  at 
the  lowest  and  selling  out  at  the  highest,  had 
realized  enormous  sums,  which  were  all  carried 
over  to  Hanover,  to  be  hoarded  or  spent  there.  It 
was  also  said  that  these  rapacious  sultanas,  and 
some  of  the  king's  ministers  as  well,  had  received 
large  sums  in  stock  from  Sir  John  Blunt,  the  pro 
jector,  and  others,  to  recommend  the  project. — 
lUd.  • 

(7.)  The  mental  aberration  of  the  public  proved 
itself  in  the  most  preposterous  demand  for  shares, 
from  persons  willing  to  stake  not  only  every  penny 
they  had,  but  many  pounds  which  they  had  not. 
The  proverb  that  "  one  fool  makes  many,"  found  a 
parallel  in  the  fact  that  one  knave  makes  many ; 
for  the  South  Sea  schemer  called  into  existence  a 
number  of  imitators,  all  anxious  to  profit  by  the 

credulity  he  had  excited Those  who 

witnessed  the  Kailway  mania  of  1845,  can  form  a 
conception — though  a  very  inadequate  one — of  the 
madness  which  prevailed  in  the  early  part  of  the 
eighteenth  century  under  the  cunning  influence  of 
Blunt,  who,  strange  to  say,  was  a  living  illustration 
of  a  marvellous  misnomer,  for  this  Blunt  was  the 
essence  of  sharpness,  at  a  time  when  obfeuseness  was 


NOTES.  337 

the  characteristic  of  all  the  rest  of  the  community. 
The  amiable  weakness  which,  in  1845,  induced  the 
whole  population  to  concur  in  planning  railways 
for  every  hole  and  corner  of  the  world,  the  philan 
thropy  which  would  have  whirled  the  Cherokees 
through  the  air  at  sixty  miles  an  hour  and  twenty 
per  cent,  profit,  or  brought  Kamschatka,  Chelsea, 
the  Catskill  mountains,  Knightsbride  and  Niagara, 
all  into  a  group,  by  the  aid  of  trunklines  or 
branches  connecting  the  whole  of  them  together, 
the  mixture  of  benevolence  and  self-interest  which 
suggested  these  noble  achievements,  cannot  bear  a 
comparison  with  the  universality  of  the  movement 

that  the  South  Sea  bubble  called  forth 

Royalty  itself  had  not  been  exempt  from  the  pre 
vailing  madness,  and  the  Prince  of  Wales  had  been 
appointed  governor  of  the  Welsh  Copper  Company, 
which  was  to  have  supplied  saucepans  to  the  whole 
civilized  world,  and  kept  the  pot  boiling  for  the  in 
habitants  of  every  corner  of  the  globe 

In  proportion  to  the  extreme  credulity  the  nation 
had  shown,  was  the  savage  disappointment  it  now 
exhibited.  The  directors  of  the  South  Sea  Com 
pany,  who  had  been  encouraged  in  their  audacious 
swindling  by  the  blind  rapacity  of  their  dupes — 
who,  in  their  haste  to  devour  everything  they  could 
\lay  hold  of,  swallowed  every  knavish  story  they 

15 


338  THE   SOUTH   SEA   BUBBLE. 

were  told — the  directors,  who,  after  all,  had  merely 
speculated  on  the  avarice  and  stupidity  of  the  rest 
of  the  world,  were  assailed  with  the  utmost  vindic- 
tiveness.  Their  conduct  was  brought  before  par 
liament  ;  some  of  them  were  taken  into  custody, 
and  all  were  called  upon  to  explain  the  grounds  on 
which  these  calculations  of  profits  were  made, 
though  the  stockholders  were  not  required  to  state 
what  reasons  they  had  for  believing,  with  their  eyes 
shut,  all  the  evidently  fallacious  promises  which 
had  been  held  out  to  them. — A'BECKET. 

(8.)  In  fact,  the  emanation  from  Law's  brain 
caused  an  epidemic  delirium  in  Europe ;  strangers 
brought  their  money  to  us,  we  carried  ours  abroad  ; 
but  if  all  nations  appeared  equal  in  their  cupidity, 
the  difference  of  national  character  appeared  after 
the  explosion.  In  England,  the  blow  was  terrible, 
and  the  throne  itself  was  shaken  ;  members  of  par 
liament  were  proscribed  and  expelled  ;  the  rage  of 
many  terminated  in  suicide.  In  France,  the  luxury 
and  pleasure  created  during  the  system^  adorned  its 
decline  and  survived  its  'fall.  There  was  a  great- 
deal  of  noise  and  very  little  action ;  embarrassment 
for  a  few,  but  no  danger  to  the  government. — LE- 
HONTE'S  Hist,  de  la  jRegence. 


COOPER'S  WORKS. 


OF    THE     FRESS. 


The  Boston  Traveller. 

We  are  at  last  to  have  a  perfect  edition  of  Cooper's  noble  works,  one  which  his  mul 
titudinous  admirers  will  not  be  ashamed  to  place  alongside  of  the  best  edition  of  Scott. 
The  publication  has  been  commenced  by  Messrs.  "W.  A.  Townsend  &  Co.,  of  New 
York,  well  known  for  liberality  and  enterprise,  and  who  can  be  depended  upon  to 
redeem  their  pledges  to  the  reading  world.  This  edition  will  consist  of  thirty-two 
volumes,  each  volume  to  contain  a  work  complete,  and  will  embrace  all  the  author's 
novels,  from  the  "The  Pioneers"  to  "The  Ways  of  the  Hour."  One  volume  will  be 
published  on  the  first  day  of  every  month,  until  the  edition  shall  have  been  completed, 
commencing  February  1st,  1S59.  Nothing  has  been  left  undone  to  render  the  edition 
as  perfect  as  art,  enterprise,  and  liberal  expenditure  can  render  it.  The  typography  13 
of  the  most  elegant  description.  The  paper  is  of  the  very  first  class  of  that  manufac 
ture,  strong,  clean,  and  smooth  as  the  palm  of  a  lady's  hand.  The  binding  is  at  once 
durable  and  beautiful.  The  size  is  the  crown  octavo,  universally  allowed  to  be  the 
best  both  for  convenience  and  preservation.  The  illustrations,  which  will  be  five 
hundred  in  number,  will  all  be  designed  by  that  consummate  genius,  F.  O.  C.  Darley, 
who  will  be  thoroughly  at  home  on  the  pages  of  Cooper.  Sixty-four  of  the  illustra 
tions  will  be  on  steel,  engraved  by  the  Smilies,  Alfred  Jones,  Delnocc,  Burt,  Girsch 
Phillibrown,  Andrews,  Pease  and  Schoff.  Those  on  wood  will  be  the  work  of  leading 
artists,  among  whom  are  Edmonds,  Whitney,  the  Orrs,  Bobbett,  and  Anthony.  Thus 
much  for  the  externals  of  the  volumes.  In  other  respects  they  will  be  found  equally 
worthy  of  the  attention  of  the  public.  Each  volume  will  contain  the  last  corrections 
of  the  author,  and  will  on  that  account  alone  present  an  unrivalled  claim  to  superiority 
over  any  other  edition.  The  publication  opens  with  "  The  Pioneers,"  one  of  the  best 
of  the  author's  works,  as  it  was  one  of  the  earliest  of  them.  It  is  a  true  picture  of 
American  life  as  it  was  nearly  seventy  years  ago,  and  as  it  is  now  on  the  remote  western 
frontiers  of  the  republic.  The  origin  of  Templeton,  and  the  manner  of  life  there,  are 
things  familiar  to  thousands  of  Americans.  Perhaps  there  is  no  one  of  Cooper's  works 
that  is,  on  the  whole,  so  agreeable  as  the  "  Pioneers."  The  scene  is  far  removed  from 
city  life,  most  of  the  characters  are  by  no  means  remarkable,  and  the  incidents  are  not 
often  "  strong,"  yet  the  author  has  made  of  his  ordinary  materials  one  of  the  most 
attractive  tales  in  the  language,  and  which  has  been  translated  into  almost  every  lan 
guage  that  has  readers.  He  takes  us  through  the  seasons  as  they  were  in  the  olden 
times,  opening  with  winter,  the  characteristics  of  which  in  our  climate  were  never 
more  forcibly  drawn  than  they  are  in  this  most  readable  of  novels;  while  those  of 
summer  and  spring  are  in  their  turn  described,  and  the  charms  of  autumn  are  briefly 
introduced.  "  The  Pioneers  "  is  the  first  of  those  of  Cooper's  works  that  have  been 
specifically  denominated  the  "  Leather  Stocking  Novels,"  and  which  have  been  not  less 
popular  than  his  admirable  sea  stories.  Natty  Bumpoo  here  first  appears,  not  in  tho 


order  of  his  life,  but  in  the  order  of  the  author's  creation.  Perhaps  Cooper's  famo 
depends  as  much  upon  this  one  character  as  upon  most  of  his  other  creations  com 
bined.  He  has  made  the  most  of  him,  and  now  it  will  be  seen  that  Barley,  laboring  on 
this  shadowy  yet  real  being  in  the  realms  of  romance,  has  given  him  a  new  title  to  gen 
eral  admiration.  We  venture  to  predict  that  this  edition  of  Cooper  will  be  eminently 
successful,  that  it  will  find  its  way  into  the  hands  of  every  person  of  taste,  and  that  no 
library,  public  or  private,  can  aflford  to  be  without  it 

The  Boston  Advertiser. 

We  have  been  highly  gratified  with  the  examination  of  specimen  pages  of  a  new 
edition  of  Cooper's  Novels  and  Tales,  to  be  published  in  New  York  by  Messrs.  W.  A. 
Townsend  &  Co.,  with  illustrations  from  steel  plates,  from  drawings  made  expressly  for 
the  work  by  Mr.  F.  O.  C.  Darley.  Mr.  Darley  is  excelled  by  no  artist  in  the  delicacy 
and  elegance  of  his  delineation  of  figures.  His  illustrations  of  Cooper's  works  have 
been,  as  we  understand,  a  "labor  of  love  "  with  him  for  a  long  period.  He  thoroughly 
appreciates  the  author,  and  is  able  to  give  expression  to  the  true  spirit  of  his  works. 
If  we  are  not  mistaken,  Cooper  is  destined  to  be  still  more  popular  with  succeeding 
generations  than  he  was  with  his  cotemporaries ;  and  this  is  saying  a  great  deal.  He  is 
thoroughly  American,  and  original ;  he  gave  permanent  place  in  literature  to  the  tra 
ditions  and  usages  of  a  people  who  have  now  almost  wholly  disappeared  from  the  con 
tinent  formerly  all  their  own.  His  "Deerslayer  "  and  "Last  of  the  Mohicans,"  cannot 
possibly  be  imitated  with  success  by  any  future  writer.  They  must  always  remain  the 
great  specimens  of  their  class  of  tales.  Cooper's  sea  stories  are  scarcely  less  remark 
able.  But  it  is  superfluous  to  speak  in  praise  of  the  value  or  interest  of  these  works, 
We  have  only  now  to  do  with  the  new  edition,  which  promises  to  be  a  fitting  dress  for 
the  author's  text,  with  the  appropriate  ornaments  of  illustration.  We  predict  for  the 
work  a  large  and  permanent  sale. 

The  Providence  Journal. 

We  are  glad  at  last  to  call  attention  to  an  American  edition  of  Cooper's  novels, 
which  promises  to  be  an  honor  to  both  publisher  and  author.  It  will  contain  the  latest 
revisions,  will  be  printed  in  good  type  on  smooth  and  handsome  paper,  bound  in  richly 
ornamented  covers,  and  illustrated  by  Darley  with  drawings  on  wood,  and  steel  vuc- 
ncttes,  executed  in  the  highest  style  of  art.  The  volume  before  us,  the  first  of  the 
series,  is  a  beautiful  book,  and  reflects  great  credit  upon  the  publishers. 

If  Messrs.  Townsend  &  Co.  carry  out  their  design  as  they  advertise  to  do,  this  edition 
of  Cooper's  novels  will  certainly  be  a  magnificent  enterprise,  and  a  worthy  monument 
to  the  fame  of  the  illustrious  author. 

The  Boston  Evening  Express. 

Messrs.  W.  A.  Townsend  &  Co.,  of  New  York,  have  commenced  the  publication  of  a 
new  and  beautiful  edition  of  this  series  of  works,  one  volume  to  be  issued  on  the  first 
of  each  month  until  the  whole  set  of  thirty-two  novels  shall  be  presented  to  the 
public  in  a  style  of  elegance,  neatness  and  value  which  they  deserve,  but  have  never 
attained. 

"  The  Pioneers,"  one  of  the  earliest  and  most  popular  of  the  series,  has  been  selected 
by  the  publishers  for  their  initial  number,  and  it  now  lies  upon  our  table.  Its  letter 
press,  typography  and  binding  are  worthy  of  all  praise;  while  its  illustrations  from 
steel  plates — one  representing  the  killing  of  the  deer,  in  the  first  chapter,  and  the  other 
Leather  Stocking  reading  the  inscription  on  the  tomb-stone  of  the  Sagamore,  in 
the  last  chapter— from  drawings  made  expressly  for  the  work  by  F.  O.  C.  Darley,  are 
very  artistic  and  excellent  in  their  execution. 

If  "The  Pioneers"  may  be  considered  a  sample  of  the  entire  series,  we  may  say 
unhesitatingly,  that  the  work  upon  which  the  enterprising  publishers  have  entered,  will 
be  an  honor  to  the  trade. 


OPTIONS    OF    THE    PRESS. 

The  Utica  (N.  T.)  Herald. 

We  clap  our  hands  and  are  glad  at  the  inception  of  this  first  really  worthy  edition  of 
Cooper's  novels.  With  a  full  appreciation  of  Walter  Scott,  and  the  parnobilefratruni 
of  living  British  novelists, — with  a  knowledge  not  limited  of  contemporary  fiction,  and 
some  acquaintance  with  Fielding.  Smollett  and  Sterne,  were  we  to  have  the  privilege 
of  perusing  the  works  of  but  one  novelist,  we  should,  as  an  American,  select  above  all 
others,  those  of  J.  Fenimore  Cooper.  Estimating,  too,  the  effects  of  fiction  on  the  inind, 
its  tendency  to  give  color  to  the  imagination,  topics  to  the  fancy  and  to  reflection,  and 
fuel  to  ambition  and  the  affections,  we  know  that  love  for  nature,  an  enlightened 
patriotism,  kindly  regard  for  humanity,  pride  in  the  beauty  of  our  scenery,  and  sym 
pathy  with  our  early  history,  spring  from  every  page  of  the  Leather  Stocking  and 
Revolutionary  Tales. 

Take  "The  Pioneers,"  for  example.  Its  scene  is  laid  in  Otsego  county,  in  our  own 
State.  It  fs  descriptive  of  the  early  settlers  in  that  region.  Leather  Stocking,  a  con 
necting  link  between  Europeans  and  Indians,  is  one  of  the  finest  creations  in  all  fiction, 
deserving  to  rank  with  Bobinson  Crusoe,  or  the  best  of  Scott's  heroes.  The  spirit  and 
circumstances  of  the  early  settlers  can  be  better  gathered  from  this  work  than  from 
tomes  of  history.  No  New  Yorker  should  read  any  novel  before  he  has  perused  not 
only  "  The  Pioneers,"  but  the  rest  of  the  Leather  Stocking  series. 

The  present  edition  is  issued  in  beautiful  style.  The  type  is  large,  clear  and  open, 
the  paper  beautiful,  and  the  binding  tasteful  and  solid.  Besides  several  small  wood 
engravings,  the  present  volume  has  two  fine  steel  engravings  from  drawings  by 
Parley ;  one  the  death  of  the  deer,  the  other,  Natty  at  the  grave  of  the  Mohegan. 
The  former  is  a  capital  scene  of  forest  and  hunting  life ;  the  latter  still  and  solemn 
and  beautiful.  They  are  worth  studying  as  works  of  art,  and  are  strong  allurements 
to  every  beholder  to  peruse  the  story  they  so  well  illustrate. 

All  of  Cooper's  novels  are  to  be  issued  in  this  handsome  style,  and  if  we  could  havo 
our  wish,  would  supplant  nine-tenths  of  the  current  works  of  fiction. 

"  The  Press,"  Philadelphia. 

In  this  new  and  beautiful  edition  we  have  two  engravings  on  steel,  executed  with 
delicacy  and  yet  with  force,  from  drawings  by  Darley,  and  a  dozen  beautiful  and  char 
acteristic  head-pieces,  executed  on  wood,  after  designs  by  the  same  artist,  who  really 
seems  to  have  taken  to  illustrating  Cooper,  as  a  labor  of  love,  so  congenially  has  he 
translated  the  author's  idea  into  that  expression  which  an  able  artist  sometimes  happily 
seizes,  which  Darley  never  misses.  This  new  edition  of  Cooper  will  probably  have  as 
large  a  sale  as  any  series  of  volumes  ever  published  in  this  country.  It  is  emphatically 
one  of  the  most  splendid  collections  ever  issued— equalled  only  by  the  embellished 
Abbotsford  edition  of  Scott's  Novels,  which  is  too  bulky  in  size  and  delicate  in  adoxn- 
ment  for  daily  use.  On  the  contrary,  this  Cooper  is  equally  adapted  for  the  Parlor  and 
the  Library. 

The  Boston  Transcript. 

AN  AMERICAN  LITERARY  ENTERPRISE. — Such  is  emphatically  the  new  edition  ot 
Cooper's  novels.  The  initial  volume,  containing  "The  Pioneers,"  has  Hist  ap 
peared.  It  is  printed  from  the  most  neat  and  distinct  type,  on  white,  substantial 
paper,  and  bound  in  a  handsome  and  appropriate  style.  A  good  library  edition  of 
Cooper  has  long  been  a  desideratum.  W.  A.  Townsend  &  Co.  have  chosen  a  seasonable 
moment  for  supplying  this  national  want.  There  is  a  comparative  lack  of  good  new 
fiction,  and  readers  gladly  resort  to  old  favorite  and  standard  reading  in  this  depart 
ment.  The  time  which  has  elapsed  since  Cooper's  death,  has  made  his  fame  and  works 
more  precious  to  his  countrymen.  The  success  of  the  Household  Waverley,  proves 
that  the  most  familiar  of  popular  authors  was  universally  welcome  in  a  new  and 
attractive  shape.  Libraries  are  forming  throughout  the  country,  and  to  each  of  these 
a  handsome  edition  of  Cooper  is  indispensable.  Every  intelligent  and  patriotic  Ameri- 


can  desires  to  own  one,  for  the  appreciation  of  native  productions  has  vastly  increased 
within  the  few  past  years.  For  these  and  many  other  reasons,  we  call  the  publication  of 
this  edition  seasonable. 

And  now,  a  word  or  two  as  to  its  peculiar  merits.  We  have  spoken  of  the  mechan 
ical  execution ;  we  must  refer  to  the  correct  text,  and  to  the  full  introductions — to  the 
convenient  arrangement — each  novel  being  complete  in  one  crown  octavo — as  superior 
to  anything  before  realized.  The  price — a  dollar  and  a  half  per  volume,  is  very  mode 
rate.  It  is  proposed  to  issue  the  series  in  successive  volumes,  beginning  on  the  first  of 
February,  and  continning  on  the  first  of  each  month  until  the  set  is  complete.  Thus 
thirty-two  volumes  will  include  all  the  tales  and  romances,  with  the  author's  latest 
revisions. 

In  addition  to  these  claims,  this  new  and  beautiful  edition  of  Cooper,  has  received 
its  crowning  distinction  from  the  vigorous,  skillful,  and,  we  must  add,  sympathetic 
pencil  of  F.  O.  C.  Darley.  His  drawings  are  universally  admired  for  their  expression, 
correctness  and  beauty ;  but  in  these  illustrations  of  Cooper,  he  seems  to  have  found 
his  most  congenial  sphere.  No  designs  executed  in  this  country  can  compare  with 
them  for  masterly  finish  and  effect.  His  genius  is  akin  to  Cooper's  in  a  certain  facile 
energy ;  he  catches  the  very  spirit  of  the  novelist's  scenes  and  characters.  In  each 
volume  there  are  two  steel  plates  and  twelve  designs  on  wood:  the  drawings  are  full 
of  spirit— the  groups  eminently  dramatic;  they  are  finished  up  in  the  most  refined 
style  of  execution — elaborately  conceived  and  executed  in  line  and  etching.  In  a  word, 
taking  in  view  the  joint  triumphs  of  author  and  artist,  and  the  liberal  taste  of  the  pub 
lisher,  we  consider  this  edition  of  Cooper  a  memorable  and  precious  example  of  native 
genius  and  enterprise,  and  a  landmark  in  the  progress  of  American  literature  and 
patriotic  feeling. 

The  Boston  Journal. 

Although  Cooper  is  pre-eminently  a  national  novelist,  we  have  no  library  edition  of 
his  works  comprising  his  latest  revisions  and  handsomely  printed.  The  one  now  com 
menced  is  in  every  respect  desirable.  It  is  printed  on  tinted  paper,  with  new  type, 
each  work  complete  in  one  volume,  and  is  bound  in  a  substantial  style,  suitable  for  a 
library.  Its  peculiar  excellence,  however,  lies  in  its  superb  illustrations  by  Darley. 
an  artist  who  is  fitted  for  his  task  not  less  by  his  long  study  and  delicate,  appreciation 
of  the  author  than  by  his  acknowledged  skill  in  his  art.  So  entirely  has  he  made  the 
creations  of  the  novelist's  fancy  his  own,  that  they  stand  out  with  the  same  bold,  vivid 
individuality  in  the  sketch  of  the  artist  as  on  the  page  of  the  author.  Every  detail  is 
given  with  fidelity,  so  that  nothing  detracts  from  the  pleasure  of  a  harmonious  whole. 
Each  work  contains  two  fine  engravings  on  steel  and  twelve  on  wood. 

The,  Northampton  (Mass.)  Gazette  and  Courier. 

It  is  truly  a  magnificent  undertaking,  and  is  to  bo  carried  out  in  a  generous  and 
liberal  manner.  Each  volume  is  beautifully  illustrated  with  two  steel  engravings,  de 
signed  by  F.  O.  C.  Darley,  and  numerous  smaller  wood-cuts  by  the  same  master 
hand.  When  the  leading  American  artist  brings  his  genius  to  the  task  of  illustrating 
the  works  of  America's  greatest  writer  of  fiction,  the  result  will  be  something  of  more 
than  ordinary  merit  The  enterprise  is  truly  American,  and  commends  itself  to  the 
reading  public  in  general,  and  will  be  hailed  with  special  delight  by  all  admirers  of 
Cooper.  The  first  volume,  "The  Pioneers,"  just  issued,  is  beautifully  printed  on 
thick,  heavy  paper,  and  it  is  a  mystery  how  a  volume  of  such  elegance  can  be  furnished 
at  the  low  price  of  $1  50. 

The  N.  Y.  Evening  Post. 

The  execution  of  the  volume  is  in  all  respects  worthy  of  the  genius  of  the  author 
whose  work  it  perpetuates,  and  cannot  fail  to  renew  the  interest  that  has  for  .«<>  long  a 
time  made  the  name  of  Cooper  one  of  the  most  prominent  in  American  literature. 
The  designs,  by  Darley,  arc  not  only  executed  in  the  best  style  of  that  emini'iit 


OPINIONS    OF   THE    PRESS.  5 

artist,  but  are  as  original  in  conception  as  is  the  tale  whose  incidents  they  delineate 
The  illustration  of  this  series  of  novels  has  long  been  a  favorite  idea  with  Darley,  and 
we  can  discover,  not  only  in  the  two  sketches  of  Leather  Stocking,  which  grace  the 
present  volume,  but  in  several  others  that  have  been  shown  to  us,  the  love  of  the  sub 
ject  which  the  artist  has  brought  to  his  labor.  Henceforth  the  reputation  of  Darley 
will  be  associated  with  his  illustrations  of  Cooper,  and  no  edition  will  be  considered 
complete  without  them. 

The  Buffalo  Commercial  Advertiser, 

Messrs.  TOWNSEND  &  Co.  have  engaged  in  the  enterprise  of  publishing  an  edition  of 
the  complete  works  of  the  great  American  novelist,  in  a  style  of  elegance  in  typo 
graphy  and  binding  befitting  the  high  merits  of  the  series.  The  American  public  owe 
a  heavy  debt  of  gratitude  to  Mr.  Cooper,  who  was  the  first  novelist  to  win  for  this 
country  an  enduring  fame  in  Avorks  of  fiction.  Nearly  all  his  works  arc  purely  Amer 
ican  in  character,  and  American  in  the  true  sense,  the  various  personages  introduced 
being  truthful  portraits  of  some  phase  of  American  character.  His  descriptions  of 
American  scenery,  too,  are  among  the  most  charming  in  our  recollection.  Add  to  this 
that  the  plot  of  all  his  tales  is  explicit,  consequent,  and  clear,  and  his  style  as  a  writer 
eminently  pleasant,  and  we  have  sufficient  reason  for  ranking  Mr.  Cooper  as  the  first 
of  American  novelists. 

The  Boston  Evening  Gazette. 

The  typographical  execution  and  general  appearance  of  "The  Pioneers"  are  most 
creditable  to  Messrs.  TOWNSEND  &  Co.  Paper,  print,  binding,  illustrations,  arc  alike 
excellent.  When  completed,  no  handsomer  volumes  will  grace  the  shelves  of  a  lib 
rary.  It  seems  almost  needless  at  this  late  day  to  urge  the  importance  of  possessing 
the  works  of  Fenimore  Cooper.  His  fictions  have  as  yet  been  equalled  by  no  Amer 
ican  author.  They  possess  a  charm  for  both  old  and  young ;  are  unexceptionable  in 
their  tone;  have  a  vividness  of  description  no  other  romancist  has  approached,  and 
are  truly  American  in  all  their  characteristics.  But  what  use  to  praise  a  man  who 
created  a  Leather  Stocking  and  a  Naramattah?  What  avails  laudation  of  the  author 
of  "The  Spy"  and  of  "The  Wept  of  the  Wish-ton-Wish ?"  His  stories  should  be 
familiar  in  every  household,  and  to  such  as  may  not  own  them,  we  would  cordially 
and  honestly  commend  the  edition  to  which  we  allude. 

The  Portland  (Me.)  Argus. 

The  style  and  finish  of  the  work  are  such  as  to  make  it  a  fitting  testimonial  to  the 
genius  of  the  most  fascinating  of  all  our  native  writers,  and  it  should  receive  the  sup 
port  and  approval  of  the  American  public. 

The  New  York  Tribune. 

In  this  first  installment  of  TOWNSENP'S  new  edition  of  the  novels  of  Cooper  we  have 
a  promise  that  the  productions  of  the  great  American  writer  of  fiction  will  be  pre 
sented  to  the  public  in  a  form  worthy  of  the  author  and  his  reputation.  The  edition 
will  be  comprised  in  thirty-two  volumes,  to  be  issued  on  the  first  day  of  each  month, 
containing  the  latest  corrections  and  revisions  of  the  author,  and  illustrated  by 
original  designs  from  the  pencil  of  Darley,  and  engraved  in  a  style  of  superior  accu 
racy  and  beauty.  The  volume  now  issued  amply  sustains  the  representations  of  ik~n 
publishers.  It  has  rarely,  if  ever,  been  surpassed  by  any  production  of  the  press  li 
this  country,  in  exact  and  finished  workmanship,  and  in  elegance  of  embellishment. 
Mr.  Dai-ley's  designs  have  caught  the  genuine  spirit  of  the  novelist,  and  reproduce  old 
Leather  Stocking  in  different  scenes  with  the  fresh  naturalness  of  the  original  page. 
The  issue  of  this  tempting  edition  can  hardly  fail  to  induce  a  host  of  readers  to  renew 
the  pleasure  with  which  they  first  made  tho  acquaintance  oi'  this  noble  illustration  of 
the  genius  of  Fenimore  Cooper. 


G  COOPER  8    WORKS. 

The  Home  Journal.    (€TEO.  P.  MOREIS  and  N.  P.  WILLIS.) 

The  initial  volume  of  this  American  series  of  novels  is  just  published.  It  would  be 
a  work  of  supererogation  to  attempt  an  analysis  of  this  volume.  Every  one  is  familiar 
•with  its  contents.  It  has  been  read  and  re-read  in  all  parts  of  the  land ;  but,  until  the 
appearance  of  this  present  volume,  there  has  been  no  edition  of  Cooper's  Novels 
worthy,  in  all  particulars,  of  his  name  and  fame.  It  is  the  mechanical  execution  of  the 
book,  therefore,  of  which  we  would  now  speak.  It  is  printed  from  clear  and  distinct 
type,  and  bound  in  a  most  substantial  and  handsome  manner.  Each  novel  will  be 
complete  in  one  crown  octavo  volume,  and  the  price — a  dollar  and  a  half— is  moderate 
The  edition  will  contain  all  the  tales  and  romances  of  Cooper,  and  will  be  comprised 
in  thirty-two  volumes,  to  be  issued  on  the  first  day  of  each  month  till  the  work  is 
completed.  An  attractive  feature  of  this  edition  will  be  the  skillful  and  admirable 
designs  of  Darlcy,  embodying  the  very  spirit  of  the  novelist's  scenes  and  characters. 
Each  volume  will  contain  two  steel  engravings  and  twelve  wood-cuts.  The  steel 
plates  will  be  executed  in  the  style  and  finish  peculiar  to  bank-note  engraving,  and 
are,  indeed,  executed  by  the  best  note-engravers  in  this  country.  They  are  a  com 
bination  of  line  and  etching,  and  are  elaborately  and  charmingly  executed. 

TJie  Rochester  Union  and  Advertiser 

A  GREAT  AMERICAN  ENTERPRISE — SPLENDID  EDITION  OF  COOPER'S  NOVELS. — It  fell 
to  an  American  publishing  house  to  bring  out  the  first  really  beautiful  illustrated 
edition  of  Scott's  Novels,  and  however  much  we  felt  bound  and  pleased  to  commend 
an  enterprise  so  creditable,  we  felt  that  our  own  great  novelist,  Cooper,  speaking  for 
his  country,  deserved  a  like  remembrance.  Not  that  we  admired  the  man,  but  his 
genius  stands  unquestioned  at  home  and  abroad.  His  works  have  done  as  much  to 
perpetuate  the  memory  of  revolutionary  heroism,  pioneer  enterprise,  and  naval  gal 
lantry  in  our  people,  as  all  the  history  ever  written.  Cooper  had  his  faults,  and  they 
were  not  few,  but  all  who  have  read  his  charming  stories  of  fiction  will  be  ready  to 
forget  the  peculiarities  of  the  writer  if  they  cannot  forgive  his  errors.  The  tales  of 
Leather  Stocking,  the  noble  hero  of  five  of  his  novels,  the  story  of  "  The  Wept  of 
Wish-ton-Wish,"  are  vivid  pictures  of  pioneer  life,  when  civilization  was  contending 
against  the  savage  possessors  of  this  continent.  "The  Spy"  and  "Lionel  Lincoln"  an* 
tales  of  the  EC  volution,  which  cannot  be  read  too  much.  The  "  Pilot,"  "  Red  Rover,*' 
and  "  Water  Witch"  are  charming  sea  tales,  and  illustrate  the  gallantry  of  our  early 
seamen.  We  say  that  we  felt  that  our  great  novelist  should  not  be  forgotten.  We  are 
happy  to  see  it  announced  that  his  works  have  not  been  forgotten,  and  that  an  edition 
of  these  novels  will  soon  begin  to  appear  from  an  American  press  that  will  excel  any 
thing  of  the  kind  ever  issued  in  this  or  any  other  country. 

The  Troy  Daily  Times. 

We  have  before  alluded  to  Townsend  &  Co.'s  republication  of  the  works  of  J.  Fen- 
irnore  Cooper.  No  American  author  was  ever  more  versatile  or  successful.  He  was 
well  called  a  writer  "who  had  the  sea  as  his  empire  and  the  forest  as  his  home."  Of 
his  long  list  of  books,  there  are  none  that  have  ceased  to  be  popular,  and  several  rank 
with  the  most  generally  circulated  literature  of  the  country.  With  these  may  Lc 
reckoned  "The  Bed  Rover,"  one  of  the  finest  sea  tales  ever  written,  just  issued  in 
admirable  form  for  permanent  preservation,  and  illustrated  with  two  magnificent  en 
gravings,  from  drawings  by  Darley.  For  sale  in  Troy,  West  Troy,  Lansingburgh,  and 
Cohoes,  by  W.  B.  Jones,  agent. 

Concord  (N.  If.)  Democrat. 

COOPER'S  NOVELS— A  SPLENDID  EDITION.— W.  A.  Townsend  &  Co.,  New  York,  book 
publishers,  are  engaged  in  an  enterprise  which  should  meet  with  the  enthusiastic  ap 
proval  of  the  American  public.  They  are  issuing  a  new  and  splendid  edition  of  the 
works  of  J.  Fenimore  Cooper— an  editioh  which  should  be  found  in  every  well-assorted 


OPINIONS    OF    THE    PRESS.  7 

library.  No  handsomer  or  more  luxurious  volumes  than  those  of  this  edition  of  Cooper's 
Novels  the  most  epicurean  book  taste  could  desire.  The  works  of  Cooper  have  become 
classic ;  and  have  contributed  more  than  the  productions  of  any  other  single  author, 
to  give  American  literature  a  distinct  and  proud  personality  among  the  literatures  of 
the  world.  We  read  Cooper's  Novels,  years  ago,  but  find  it  such  a  luxury  to  peruse- 
them  in  this  edition,  that  we  mean  to  go  over  them  again.  Such  will  bo  the  experience 
of  many,  we  trust. 

Tfie  Baltimore,  Patriot. 

As  we  expected,  this  best  edition  of  the  greatest  of  American  novelists  has  proven 
a  complete  success.  It  is  gratifying  to  notice  the  promptness  with  which  the  admirers 
of  the  distinguished  novelist  have  responded  to  the  prospectus  of  the  publishers,  and 
placed  beyond  a  doubt  the  regular  and  perfect  issue  of  an  edition  of  his  immortal  works 
that  shall  be  an  honor  to  his  memory,  and  a  credit  to  American  taste  and  American 
art.  Considered  as  a  national  enterprise,  it  merits  this  success,  and,  as  we  have  said, 
we  are  glad  to  chronicle  it.  Messrs.  W.  A.  Townsend  &  Co.  have  spared  no  outlay  or 
labor  to  make  the  work,  as  it  is,  the  most  elegant  and  satisfactory  ever  issued  from  the 
American  press. 

Tlie  Philadelphia  Daily  News. 

This  is  a  great  enterprise.  The  publishers  have  already  invested  an  almost  fabulous 
sum  in  the  present  series.  The  five  hundred  illustrations  alone,  all  designed  by 
Darley,  and  including  sixty-four  engravings  on  steel,  would  involve  a  handsome  out 
lay.  But  there  will  be  no  risk.  The  American  people  possess  sufficient  taste,  liberality, 
and  patriotism  to  render  it  worth  while  to  present  them  a  model  edition  of  their  favor 
ite  representative  novelist.  "We  will  not  offend  the  intelligence  of  our  readers  by 
attempting  any  analysis  of  novels  whose  characteristics  are  so  universally  known 
wherever  the  English  language  is  read  or  spoken,  as  those  of  Cooper.  Suffice  it  to  say 
that  they  are  now  being  "  dressed"  in  admirable  style. 

The  New  York  Leader. 

We  made  the  inevitable  remark,  in  reviewing  the  first  number  of  this  admirable 
series,  that  it  could  only  be  a  work  of  supererogation  to  attempt  criticism  upon  the 
novels  of  Fenimore  Cooper,  at  this  late  day.  The  issue  of  the  second  number  of  tho 
series — "The  Eed  Kover" — recalls  the  observation,  and  necessitates  its  repetition.  It 
is  well  known  to  all  writers,  and  to  most  readers  of  fiction,  that  tho  uEed  Eover"  was 
tho  great  original  and  type  of  a  class  of  works  which  havo  since  so  well  filled  tho 
shelves  of  booksellers,  and  the  attention  of  readers :  i.  e.,  the  nautical  tale,  with  char 
acter  painting  as  a  component.  Few  novelists  who  enjoy  opportunity  for  the  study  of 
character  ever  know  enough  about  a  ship  to  distinguish  the  spanker-boom  from  the 
cat-head,  or  to  know  that  "  splicing  the  main  brace"  is  any  thing  more  than  a  nautical 
evolution ;  and  the  result  is  a  series  of  tales  which  may  embarrass  landsmen,  but  can 
only  provoke  a  smile  upon  the  faces  of  salt-water  sailors.  Cooper  was  sailor  as  well 
as  student — had  seen  blue  water  and  smelt  powder ;  and  the  "  Eed  Eover"  was  tho 
best  result.  We  need  only  add  that  this  second  volume  of  Messrs.  Townsend  &  Co.'s 
series  is  quite  up  to  the  mark  of  the  former  in  paper,  type,  and  binding ;  and  equally 
excellent,  though  less  profuse,  in  the  inimitable  illustrations  by  Darley. 

Tlie  Buffalo  Courier. 

Too  much  cannot  be  said  in  praise  of  the  typographical  execution  of  this  edition, 
and  of  the  spirited  illustrations  which  accompany  each  volume.  Nothing  which  the 
present  advanced  stage  of  the  book-making  art  can  command  has  been  neglected  in 
their  publication.  Beautiful  as  these  books  are,  they  are  not  too  ornate  nor  too  sub 
stantial  to  be  the  fitting  mediums  of  acquainting  the  American  people  more  fully  with 
the  writings  of  the  great  American  novelist.  We  learn  that  there  are  about  one 
hundred  subscribers  in  this  city.  The  number  certainly  ought  to  be  doubled. 


8  COOPER  8    WORKS. 

TJiA  PJiUadelphia  Ledger. 

W.  A.  Townsend  &  Co.,  publishers,  New  York,  are  issuing  an  illustrated  edition  of 
Cooper's  Novels,  with  drawings  in  steel  and  wood  byDarley.  The  volumes  issued  so 
far  are  the  "  Pioneers"  and  "Bed  Eover,"  and,  judging  from  these  specimen  volumes, 
the  collection  will  be  the  most  beautiful  edition  of  these  national  romances  which 
has  ever  come  from  the  press.  They  are  a  credit  to  the  publishers,  and  their  enter 
prise  deserves  the  highest  success.  Each  volume  is  printed  on  superfine  cream-tinted 
and  calendered  paper  from  the  most  perfectly-formed  type,  in  a  large  crown  octavo 
page,  elegantly  bound  in  embossed  cloth,  with  bevelled  edges.  In  elegance  and 
artistic  finish  they  are  not  to  bo  surpassed. 

The  Rome  (N.  F.)  Sentinel. 

Messrs.  W.  A.  Townsend  &  Co.,  of  New  York,  have  commenced  the  issue  of  their 
new  and  splendid  illustrated  edition  of  Cooper's  works,  which  was  announced  some 
time  since.  The  first  of  the  series,  as  it  now  appears,  is  the  "  Pioneers,"  a  story  of 
Southern  New  York.  The  book,  in  mechanical  appearance,  exceeds  even  our  ex 
pectations  from  the  promise  made  by  the  publishers.  Nothing  ever  issued  from  the 
press,  except  it  be  something  of  the  parlor  annual  kind,  can  compare  with  this  work. 
The  paper,  printing,  binding,  and  all  else  are  in  keeping  with  the  illustrations  by 
Darley,  which  are  his  crowning  triumph  as  the  first  American  artist.  In  such  a  garb 
the  capital  tale  of  the  "  Pioneers"  looks  like  a  new  story.  The  tales  of  Cooper  arc, 
many  of  them,  of  an  historic  kind,  intended  to  portray  American  character,  and  they 
are  as  pure  as  any  fiction  ever  written.  If  parents  and  others  in  charge  of  the  young 
would  introduce  to  them  literature  as  pure  as  the  writings  of  Cooper,  the  literary 
taste  of  the  youth  of  our  country  would  not  become  vitiated  and  poisoned  as  it  now 
is  by  the  stuff  which  is  pouring  daily  from  the  press  in  the  various^forms  of  romance. 

Tlie  Springfield  (Mass.')  Republican. 

The  second  volume  of  Townsend  &  Co.'s  beautiful  edition  of  Cooper's  Novels  con 
tains  the  "  Ked  Eover."  Of  the  style  and  value  of  this  edition  we  have  spoken  be 
fore  in  sincere  commendation.  If  any  body  supposes  it  is  too  highly  praised,  let  him 
look  at  it.  The  edition  is  one  of  the  finest  specimens  of  the  typographical  art  ever 
issued  by  the  American  press. 

TJie  Wilmington  (Del.*)  Gazette. 

Tho  present  volume  contains  the  "  Eed  Eover,"  the  second  of  Cooper's  great  sea 
stories  in  the  order  of  production,  it  having  been  written  in  1827,  but  unequivocally 
the  greatest  of  them  all.  We  are  glad  to  see  that  this  elegant  edition  of  the  greatest 
of  American  novelists  is  a  grand  success.  From  all  parts  of  the  country  it  has  been 
hailed  with  delight  and  admiration,  the  promise  of  the  publishers  that  it  "shall  excel 
in  elegance,  artistic  beauty,  and  mechanical  perfection  any  publication  heretofore 
issued  in  this  country,"  thus  far  being  vindicated  to  the  letter.  The  volumes  are 
published  monthly,  and  should  find  a  place  in  every  American  library. 

The  Hartford  Courant. 

This  edition,  from  the  elegance  of  its  binding,  the  clearness  of  its  typography,  tho 
fineness  of  its  paper,  and  the  beauty  of  its  embellishments,  is  far  superior  to  any  of 
the  previous  editions  of  this  famous  novelist.  In  fact  no  American  fiction  writer  has 
ever  before  been  honored  by  so  splendid  a  dress. 

"The  Eed  Eover"  first  appeared  in  1827,  being  the  second  of  Coopers  sea  stories. 
It  created  a  great  sensation  in  the  reading  world,  particularly  in  England,  where  it  was 
repeatedly  dramatized.  The  older  of  our  readers  will  remember  the  interest  attracted 
by  Cooper^  tales— scarcely  surpassed  by  Sir  Walter  Scott'*— and  "Tho  Eed  Eover"  is 


OPINIONS    OF    THE    PEESS. 

one  of  the  best.  In  its  new  dress  it  cannot  fail  to  be  pleasurably  received  by  the 
numerous  subscribers  to  the  edition.  The  illustrations— drawn  expressly  for  this 
edition  by  Darley — are  in  his  well-known,  inimitable  style ;  a  style  that  cannot  be  sur 
passed  by  any  living  artist. 

The  Boston  Herald. 

THE  EBD  EOVER. — This  is  the  second  volume  of  the  finest  edition  of  Cooper's  Novels 
that  has  ever  yet  been  given  to  the  public,  and  the  admirers  of  our  unapproachable 
American  should  not  fail  to  improve  the  present  opportunity  to  possess  Cooper  in 

this  elegant  form. 

The  Home  Journal.    (MoEEis  &  WILLIS.) 

"The  Eed  Eover"  is  the  last  issue  of  the  new  edition,  published  by  Townsend  & 
Co.,  of  America's  greatest  novelist.  The  engravings  excel  even  the  ones  that  illustra 
ted  the  first  of  the  series — "  The  Pioneers."  No  such  excellent  illustrations  have  ap 
peared  in  any  work  ever  published  in  this  country.  They  are  truly  admirable,  both 
in  design  and  execution.  In  its  typographical  appearance,  the  book  is  charming;  tho 
contrast  it  presents  to  the  same  work,  as  published  thirty  years  ago,  is  certainly  most 
wonderful. 

The  New  York,  Evening  Post.    (WILLIAM  CTTLLEN  BRYANT,  Editor.) 

In  the  appearance  of  this  remarkable  sea-story,  which  has  probably  never  been  sur 
passed,  if  equalled,  we  have  additional  evidence  that  neither  the  illustrator  nor  the 
publishers  have  relaxed  in  their  efforts  to  make  this  edition  worthy  of  the  subjects 
they  delineate.  It  affords  us  great  gratification  to  be  enabled  to  state  that  the  pub 
lishers  have  not  been  mistaken  in  their  judgment  of  the  want  of  a  proper  edition  of 
Cooper's  novels,  and  that  the  large  expenditure  which  has  been  made  for  illustrations 
and  typographical  execution  is  likely  to  prove  highly  remunerative. 

The  St.  Louis  Republican. 

THE  EED  EOVEB. — This  novel  is  part  of  the  scries  of  Cooper's  novels  which  has  al 
ready  been  mentioned  in  our  columns.  This  edition  is  beautifully  illustrated  by  en 
gravings  from  drawings  by  F.  O.  C.  Darley,  and  in  the  excellence  displayed  in  its 
paper,  print,  and  binding,  is  most  creditable  to  the  book  manufacturing  art  in  our 
country ;  the  admirers  of  Cooper's  fictions  will  be  pleased  with  this  opportunity  of 
possessing  them  in  so  elegant  a  form. 

The  Commercial  Bulletin,  Boston. 

THE  PIONEERS. — There  are  numerous  editions  of  Cooper's  works,  and  the  sale  of 
every  edition  is  large,  thus  proving  how  popular  his  writings  are ;  but  no  first  class 
edition  of  his  works,  complete,  and  embracing  all  of  his  novels  in  uniform  shape,  with 
illustrations  has  been  attempted  until  now.  Some  of  his  novels  have  been  selected 
for  the  higher  typographical  honors,  but  even  those  lacked  illustrations.  Messrs.  Town- 
send  &  Co.  have  commenced  supplying  the  want  that  has  been  felt,  and  in  "  The  Pio 
neers"  have  given  us  the  first  volume  of  an  edition  of  the  best  American  novels  in  a 
style  quite  worthy  of  their  intrinsic  merits,  their  great  popularity,  and  the  estimate 
in  which  they  are  held  throughout  the  whole  reading  world.  .  Nothing  more  beautiful 
has  ever  been  published  by  an  American  house.  Every  thing  used  in  getting  up  the 
volume  is  perfect  in  its  kind — paper,  type,  binding,  engravings,  and  so  forth — and  the 
combination  of  all  these  good  things  is  a  splendid  volume,  of  which  any  publishing 
house  might  be  proud,  and  which  is  worthy  to  be  placed  among  the  finest  collections 
of  books  in  this  or  any  other  country.  That  the  publishers  do  not  mean  to  spare  any 
cost  on  this  edition,  and  that  it  will  be  illustrated  in  a  style  worthy  of  the  author,  nro 
facts  established  by  their  having  engaged  the  services  of  so  admirable  an  artist  as 
Darley,  than  whom  no  man  is  more  familiar  with  Cooper's  writings.  His  drawings 
have  been  engraved  by  many  of  tho  leading  artists  of  the  age,  and  are  all  that  could 
be  asked  by  the  most  fastidious  taste,  or  demanded  by  tho  most  ardent  admirer  of  the 
first  American  novelist. 


10  COOPER'S  WORKS. 

The  Providence  (R.  /.)  Press. 

THE  COOPEE  NOVELS.— Messrs.  Townsend  &  Co.,  of  New  York,  are  doing  for  our 
great  American  novelist,  what  Messrs.  Black,  of  Edinburgh,  did  for  "The  Wizard  of 
the  North  " — giving  him  a  publisher's  lease  of  immortality,  in  sumptuousness  of  edi 
tion.  The  "  Abbottsford  Waverley"  is  not  a  whit  more  elegant  than  the  new  edition 
of  Cooper's  works,  now  issuing  from  Townsend's  press,  in  crown-octavo  volumes. 
Five  hundred  designs  by  Darley  Avill  illustrate  the  edition,  and  of  these  sixty  will  be 
engraved  on  steel  by  Smilie,  the  best  engraver  of  this  country. 

The  Utica  (N.  Y.)  Observer. 

It  is  our  pleasure  to  draw  attention  to  even  a  nobler  monument  to  the  fame  of 
Cooper  than  the  one  which  is  to  be  raised  at  Cooperstown,  It  is  a  monument  which 
will  make  him  known  to  the  thousands  who  can  never  view  the  contemplated  shaft 
over  Cooper's  grave,  and  which  will  help  to  perpetuate  his  name  long  after  the  marble 
shall  have  crumbled,  and  been  prostrated  by  the  forces  of  the  seasons. 

It  is  a  great  National  Publishing  and  Artistic  Enterprise  to  which  we  allude.  It  is 
in  the  hands  of  W.  A.  Townsend  &  Co.,  46  Walker  st,  New  York.  That  enterprising 
firm  have  already  commenced  the  issue  of  "A  splendid  illustrated  Edition  of  Cooper's 
Novels,  issued  in  a  style  of  unsurpassed  elegance,  and  beautifully  illustrated  by  five 
hundred  Original  Drawings,  by  Felix  O  C.  Darley,  executed  on  steel  and  wood  in  the 
costliest  style,  by  the  most  eminent  engravers  in  the  country."  We  do  not  put  too 
much  emphasis  on  this,  when  we  say  that  it  is  one  of  the  most  deserving  artistic  and 
publishing  enterprises  of  the  day.  As  Cooper  stands  at  the  head  of  our  national  novel 
writers,  so  does  Darley,  that  great  master  of  design,  stand  at  the  head  of  his  profession. 
And  thus  we  are  to  have  the  works  of  the  greatest  American  novelist  illustrated  by 
the  greatest  American  designer. 

The  publishers,  Messrs.  Townsend  &  Co.,  in  announcing  their  intentions,  some 
time  ago,  did  not  promise  more  than  they  intend  to  fulfill.  This  we  can  say,  because 
the  first  two  novels  of  the  series — which  will  number  thirty-two  volumes,  one  of  which 
is  to  be  issued  every  month — are  before  us. — They  are  "  The  Pioneers,"  and  the  "  Ecd 
Eover."  The  handsome  type,  the  superfine,  cream-tinted  and  calendered  paper,  the 
large  crown-octavo  page,  the  elegant  binding  ivith  embossed  cloth  and  bevelled  edges, 
the  designs  on  wood,  and,  above  all,  the  vignettes  on  steel,  executed  with  bank-note 
finish,  fall  not  one  whit  behind  what  Townsend  &  Co.  gave  the  reading  world  reason 
to  expect. 

TJie  Bangor  (Me.)  Daily  Times. 

A  SPLENDID  ILLUSTRATED  EDITION  or  COOPER'S  NOVELS. — The  lovers  of  beautiful 
books,  and  the  admirers  of  the  great  American  novelist,  will  hail  wtih  pleasure  the 
splendid  national  edition  which  Messrs.  Townsend  &  Co.,  of  New  York,  have  com 
menced  issuing  from  their  press.  What  Messrs.  Ticknor  &  Fields  have  just  accom 
plished  for  the  Waverley,  in  their  beautiful  household  edition,  the  New  York  publish 
ers  will  far  excel  in  the  presentation  of  Cooper,  whose  genius  will  bo  honored  with  a 
stylo  of  dress  and  a  beauty  of  illustration  never  equalled  or  attempted  for  a  work  of 
similar  extent  in  this  country,  and  which  will  reflect  the  highest  credit  upon  American 
bookcraft. 

The  New  York  Daily  Times. 

Messrs.  W.  A.  Townsend  &  Co.  have  performed  a  most  acceptable  service  to  Ameri 
can  literature,  by  the  publication  of  their  new  edition  of  Cooper's  novels,  of  which 
three  volumes,  "The  Pioneers,"  "Bed  Eover,"  and  the  "Last  of  the  Mohicans,"  have 
already  been  issued.  The  style  in  which  these  classical  romances  are  published  is 
the  very  highest  that  has  been  attained  in  American  book-making.  The  designs  of 
Darley,  of  which  there  are  two  in  each  volume,  engraved  in  line  on  steel,  and  the 
wood  vignettes,  are  among  the  finest  specimens  of  illustrative  art.  The  "  Death  of 
Scipio,"  one  of  the  illustrations  of  the  "  Bed  Bover,"  ranks  among  the  most  successful 


OPINIONS    OF    THE    PRESS.  11 

efforts  of  the  artist's  pencil.  The  original  of  the  picture  was  in  the  exhibition  of  the 
National  Academy,  last  year,  where  it  excited  great  admiration. 

The  Rochester  (N.  Y.)  Democrat. 

THE  LAST  OP  THE  MOHICANS. — This  is  the  third  of  the  sumptuous  edition  of  Cooper's 
novels,  illustrated  by  Darley,  the  eminent  designer.  The  genius  of  the  American 
novelist  has  here  portrayed  the  Indian  character,  as  it  was  found  to  exist  among  the 
tribes  who  inhabited  New  York  and  the  Canadas  previous  to  the  Bevolution.  The 
English  and  the  French  alternately  engaged  the  fierce  aborigines  as  their  allies,  and 
fearful  massacres  of  white  men,  by  the  treacherous  savages,  was  the  natural  conse 
quence.  One  of  the  scenes  depicted  by  the  masterly  pen  of  Cooper,  is  the  massacre  at 
the  surrender  of  Fort  "William  Henry  to  the  French.  Another,  is  a  battle  between 
two  Indian  tribes — the  Delawares  and  Hurons.  A  love  story,  with  adventures  and 
hair-breadth  escapes,  captivity  and  rescue,  tragedy  and  humor,  all  lend  interest  to  a 
historical  novel,  in  which  the  red  men,  who  are  now  so  nearly  extinct  in  this  part  of 
the  country  take  a  conspicuous  part.  "When  they  are  no  more  seen,  these  novels  will 
present  the  character  of  the  "Lost  Tribes"  in  a  life-like  and  masterly  manner  to 
future  generations ;  and  the  writings  of  Cooper  will  never  die. 

The,  Mobile  (Ala.)  Advertiser. 

There  is  no  question  that  J.  Fenimoro  Cooper  held  the  very  front  rank  as  a  writer 
of  fiction ;  his  popularity  in  this  respect  has  had  no  parallel  in  this  country.  He 
originated  a  distinct  class  of  fiction,  national  in  its  character,  and  patriotic  in  its  aims 
and  teachings.  Notwithstanding  the  fertility  of  his  pen,  and  the  rapid  production  of 
his  novels,  he  managed  to  preserve  a  remarkable  freshness  of  style,  and  so  to  keep  up 
the  interest  of  the  story,  that  the  reader's  attention  never  flags,  nor  his  taste  becomes 
cloyed. 

•  "We  regard  this  enterprise  as  in  some  sort  one  of  a  national  character.  The  first  of 
American  designers  illustrating  the  works  of  the  first  of  American  novelists,  treating 
altogether  of  American  subjects  and  scenes,  would  certainly  seem  to  entitle  the  com 
pleted  work  to  the  special  consideration  of  American  readers. 

The  Concord  (N.  JT)  Patriot. 

By  a  singular  coincidence,  two  very  decided  recognitions  of  Cooper's  genius  trans 
pired  on  the  first  instant.  Townsend  &  Co.  issued  the  third  volume  of  their  magni 
ficent,  new,  illustrated  edition  of  his  novels,  which  chanced  to  be  "  The  last  of  the 
Mohicans,'1- and  the  United  States  Navy  Department  decided  to  name  the  new  war 
steamship  now  building  at  Portsmouth  navy-yard,  the  "  Mohican."  This  action  of 
the  department  has  proved  conclusively  that  the  "Last  of  the  Mohicans  "  was  not  the 
Iftst  "Mohican,"  and  is  also  a  proud  display  of  the  lasting  hold  Cooper  has  upon  the 

national  heart The  illustrations  in  this  volume  are,  if  possible,  better  executed 

than  those  in  the  two  previously  issued.  "We  could  not  suggest  an  improvement  to 
this  edition.  It  is  entirely  satisfactory,  and  we  can  but  advise  those  who  desire  to 
possess  Cooper's  novels — and  who  does  not  ? — not  to  let  slip  this  opportunity  to  get 
the  best  edition  which  will  ever  be  offered  to  them. 

The  Boston  Recorder. 

The  first  volume  of  the  series  we  have  now  before  us,  and  it  is  in  a  style  to  meet  the 
reasonable  wishes  of  the  author's  greatest  admirers.  The  paper  is  excellent,  the  type 
good,  and  the  form  and  binding  every  way  satisfactory.  "We  seldom  look  upon  a 
fairer  page,  or  take  in  hand  a  more  tasteful  volume. 

Of  the  particular  work  before  us,  the  "Pioneers,"  we  shall  enter  into  no  minute 
criticism.  It  is  confessedly  one  of  the  most  interesting  of  all  the  author's  numerous 
und  characteristic  tales.  Not  to  have  read  it,  argues  an  oversight  of  a  book  with  which 
every  well-read  American  should  be  acquainted.  The  reading  public  are  under  great 


12 

obligations  to  Messrs.  Townsend  &  Co.  for  this  unequalled  edition  of  an  author  whoso 
name  is  an  honor  to  the  nation,  and  whose  fame  is  in  all  civilized  lands,  and  of  whom 
the  Edinburgh  Review  has  said : 

"The  empire  of  the  sea  has  been  conceded  to  him  by  acclamation ;  and  in  the  lonely 
desert  or  untrodden  prairie,  among  the  savage  Indians,  or  the  scarcely  less  savage  set 
tlers,  all  equally  acknowledge  his  dominion. 

"  Within  this  circle  none  dare  move  but  he." 

The  New  Haven  Palladium. 

The  specimens  shown  us  of  the  work  are  enough  to  captivate  any  body.  The  bind 
ing  is  elegant,  and  yet  heavy  and  durable ;  the  paper  is  manufactured  expressly  for 
this  purpose,  and  is  richly  tinted  and  calendered :  the  size  is  appropriate — a  large 
crown  octavo,  and  the  page  is  most  beautifully  printed.  The  illustrations,  by  the  first 
of  American  artists,  are  truly  creditable  to  him,  and  worthy  of  the  work  which  they 
embellish.  "Whether  in  the  design  or  the  execution  they  can  hardly  be  surpassed.  It 
is  stated  that  the  engravings  alone  cost  $20,000. 

Cooper's  novels  deserve  such  an  elegant  dress  better  than  any  other  American  fiction, 
because  they  alone  are  truly  American  in  every  sense.  "When  Bryant  said  of  him, 
"  The  creations  of  his  genius  shall  survive  through  centuries  to  come,"  and  "Webster 
said,  "  While  the  love  of  country  continues,  his  memory  will  exist  in  the  hearts  of  tho 
people,"  they  but  render  a  just  tribute  to  his  remarkable  creative  powers,  and  to  the 
spirit  of  nationality  that  inspires  all  his  writings. 

The  New  York  Commercial  Times. 

AN  AMERICAN  BOOK. — Tho  "Pioneers"  of  Cooper,  illustrated  by  Darley,  has  just 
been  issued  by  Messrs.  W.  A.  Townsend  &  Co.,  as  the  first  of  a  series  of  the  works  of 
the  great  novelist,  whose  bold  conceptions  of  the  woods  and  woodsmen  of  America 
have  found  a  worthy  illustrator  in  the  artist  by  whose  graceful  and  spirited  pencil  each 
of  the  volumes  of  the  series  is  to  be  adorned.  This  edition,  which  is  dedicated  by  the 
publishers  to  tho  "  American  People,"  will  compare  favorably,  in  all  the  mechanical 
departments  of  type,  paper,  and  binding,  with  any  work  of  the  kind  hitherto  issued  on 
either  side  of  tho  Atlantic.  But  the  distinguishing  feature  of  the  book  before  us  is  the 
conscientious  rendering  by  Darley  of  two  of  tho  most  striking  descriptive  scenes  in  tho 
story.  The  conception  of  Leather-stocking  as  he  calmly  reloads  his  rifle,  in  the  open 
ing  scene  with  Judge  Temple,  and  the  grim  sarcastic  expression  which  the  artist  has 
infused  into  the  hard  old  features  of  that  stark  coureur  des  lois,  are  beyond  all  praise, 
the  whole  figure  teeming  with  character,  which  extends  even  to  his  rifle,  and  down 
to  its  very  butt.  Another  design  is  an  illustration  of  the  closing  scene — Old  Leather- 
stocking  visiting  the  graves  of  the  "Major,"  and  the  "Mohcgan,"  and  is  a  very  touch 
ing  embodiment  of  a  touching  incident,  full  of  pathos  and  expression.  These  de 
signs  are  admirably  engraved,  the  one  by  Girsch,  and  the  other  by  Wrightson.  The 
volume  is  one  of  which  the  publishers  may  justly  be  proud;  for  seldom  has  there  been 
issued  in,  popular  form,  a  more  elegant  edition  of  a  truly  American  book. 

The  Newark  (N.  J.)  Advertiser. 

THE  PIONEERS.— The  issue  of  the  splendid  edition  of  Cooper's  Works  which  is  now 
commenced  by  the  publication  of  "The  Pioneers,"  is  an  undertaking  of  no  little  mag 
nitude  and  importance.  It  was  an  era  in  American  authorship  when  Cooper  issued  a 
work,  and  the  standing  order  of  $5,000,  made  by  Bentley  of  London  for  the  English 
copyright  was  considered  a  matter  of  national  pride.  But  these  days  are  gone  by. 
Cooper  is  not  now  the  only  (with  Irving)  American  author  with  a  European  reputa 
tion.  We  have  our  works  reprinted  by  hundreds,  till  we  are  no  longer  proud  to  have 
them  stolen.  May  we  soon  be  so  grieved  as  to  be  willing  to  have  an  international 
copyright!  Newer  writings  may  have  temporally  hidden  tho  works  of  the  great 
American  novelist,  but  none  in  Europe  can  compete  in  popularity  with  him.  And 


OPINIONS    OF   THE    PRESS.  13 

ft* 

now  we  are  glad  to  sec  that  a  new  edition  de  luxe  is  to  honor  the  writer,  and  inspire  a 
new  enthusiasm  into  our  own  people.  The  style  in  which  this  edition  is  issued  is 
worthy  of  the  man  and  his  rank  among  our  foremost  native  writers,  Darley,  the  best 
of  our  native  draughtsmen,  a  man  fully  imbued  with  the  picturesqueness  and  nation 
ality  of  the  country,  whose  keen  eye  notes  the  type  of  the  red  man,  the  sky,  and 
foliage  of  the  American  prairie,  the  shape  of  the  lithe  antelope,  the  heavy  bear,  who  feels 
the  spirit  of  the  scenes  described,  in  whose  drawings  you  will  find  no  anachronisms. 
Darley  contributes  two  illustrations  to  each  of  the  thirty-two  volumes  which  com 
pose  this  set.  "VVe  have  seen  some  dozen  or  more  of  these  spirited  sketches,  and  can 
safely  say  that  no  more  exquisite  works  of  art  have  ever  illustrated  any  work  issued  in 
this  country,  if  in  Europe.  Nor  is  illustration  all.  The  edition  is  faultless  in  type, 
printing,  paper,  and  binding.  Particularly  we  note  the  cloth  binding  of  this  edition  as 
one  of  the  neatest  and  most  durable  of  its  class.  We  have  thus  made  especial  mention 
of  this  enterprise  on  account  of  its  magnitude,  its  artistic  superiority,  and  its  national 
importance,  and  we  trust  that  it  will  be  properly  encouraged. 

The  Gazette  and  Democrat,  Reading,  Pa. 

The  paper,  printing,  pictorial  embellishment,  and  binding  of  these  volumes  are  so 
superior  as  to  call  forth  the  most  unqualified  praise  of  the  press,  both  in  this  country 
and  in  England ;  and,  indeed,  it  may  be  safely  said  that  no  American  books  were  ever 
issued  which  excel  them  in  tasteful  design  and  elegance  of  execution.  They  form  an 
edition  of  Cooper's  Writings  eminently  worthy  of  their  distinguished  author;  and, 
indeed,  the  only  one  fit  to  grace  the  library.  The  new  volumes  contain  "  The  Last  of 
the  Mohicans"  and  "  The  Spy,"  the  illustrations  to  which  are  really  splendid.  The 
vignette  to  the  latter,  representing  the  escape  of  Harvey  Birch,  is  a  perfect  gem.  "  The 
Spy"  contains  two  of  the  best  characters  ever  drawn  by  Cooper — Harvey  Birch,  the 
Spy,  and  the  grave  but  gallant  gentleman,  Mr.  Harper,  who  eventually  appears  as 
Washington  himself.  Prefixed  to  this  edition  is  the  author's  introduction,  giving  a 
history  of  the  writing  of  the  book,  and  the  real  incident  which  suggested  it. 

Cincinnati  Daily  Gazette. 

COOPER'S  NOVELS,  ILLUSTRATED. — Messrs.  Townsend  &  Co.'s  new  edition  of  Cooper's 
Novels,  with  illustrations  by  the  inimitable  Darley,  will  prove  a  lasting  benefit  to  the 
public,  and  we  trust  also  to  the  publishers. 

Of  the  thirty-two  volumes  which  will  complete  the  series,  three  have  already  ap 
peared—viz.:  "The  Pioneers,"  " The  Eed  Eover,"  and  "The  Last  of  the  Mohicans." 
They  contain  the  author's  final  revisions,  two  steel  engravings  each,  which,  though 
executed  with  marvellous  finish,  still  retain  all  the  spirit  of  the  designer,  beside  a  largo 
number  of  tasteful  vignettes.  The  typography  is  truly  elegant,  the  paper  soft-tinted^ 
smooth,  and  clear,  the  binding  neat,  strong,  and  appropriate.  Altogether  the  edition 
promises  to  do  honor  to  a  writer  who,  with  all  his  faults,  deserves  the  name  of  the 
American  Walter  Scott. 

The  price  of  the  volumes  is  exceedingly  reasonable,  being  but  $1.50.  Eobert  Clarko 
&  Co.  are  the  Cincinnati  agents  for  the  sale  of  the  series. 

The  National  Intelligencer,  Washington,  D.  C. 

COOPER'S  NOVELS. — We  have  before  us  several  volumes  of  the  above  novels,  and,  on 
looking  over  them,  have  been  so  delighted  that  we  cannot  withstand  the  temptation  to 
congratulate  the  public  upon  this  latest  magnificent  issue  from  the  New  York  press. 

The  publishers  have  indeed  done  justice  to  the  ever-fresh  and  ever-welcome  crea. 
tions  of  J.  Fenimore  Cooper,  our  national  author,  the  Walter  Scott  of  America.  He 
needs  no  encomium  from  us.  The  eagerness  with  which  each  generation  of  readers 
seizes  upon  his  glowing  and  truthful  portraitures  proves  the  firm  hold  he  has  upon  the 
public  heart  and  fancy;  but  if  by  chance  there  is  any  one  who  has  not  followed  the 
author  in  his  graphic  description  of  the  varied  adventures  of  those  who  "  go  down  to 


14  COOPER'S  WORKS. 

the  sea  in  ships,"  or  who  is  not  familiar  with  his  inimitable  scenes  of  the  forest  at»d 
prairie,  of  the  customs  and  every-day  life  of  the  red  man,  who  is  so  surely  passijg 
away,  and  will  soon  live  only  in  Cooper's  magic  pages,  this  intellectual  omission  should 
be  remedied  at  once  by  obtaining  this  beautiful  set  of  novels,  and,  our  word  for  it,  he 
will  not  repent  his  bargain.  To  add  to  the  charm  of  these  works  (if  such  be  deemed 
possible),  the  services  of  Darley  have  been  brought  into  requisition,  a  host  in  himself; 
and  these  illustrations  are  worthy  of  his  fame  as  the  first  designer  in  our  country,  and 
not  inferior,  in  the  estimation  of  high  English  authority,  to  Eetsch  himself.  Many  of 
our  readers,  we  doubt  not,  have  seen  the  evidences  of  his  wonderful  artistic  conception 
and  faithful  expression  in  that  remarkable  book  "  Margaret,"  also  in  his  etchings  of 
"  Eip  Van  Winkle,"  while  Hood's  "  Bridge  of  Sighs"  has  also  been  exquisitely  inter 
preted  by  his  delicate  and  vivid  pencil. 

Messrs.  Townsend  &  Co.  have  brought  out  these  books  in  a  substantial  form  and 
beautiful  finish,  which  may  successfully  compete  with  English  and  French  editions 
de  lua-e,  and  of  which  they  may  well  be  proud.  Their  intention  is  to  publish  a  volume- 
monthly,  each  to  contain  a  novel  complete.  Those  which  have  already  reached  us  are 
printed  from  perfectly-formed  type,  in  crown  octavo,  on  beautiful  cream-tinted  paper 
manufactured  expressly  for  this  edition,  solidly  and  elegantly  bound  in  cloth,  stamped 
with  designs  new  and  appropriate  to  the  subject-matter. 

The  Vox,  Populi,  Lowell,  Mass. 

There  is  a  grateful  flow  of  satisfaction  in  sitting  down  to  notice  a  work  that  we  know 
will  warrant  all  we  could  desire  to  say  in  its  favor.  Of  Cooper's  Novels  there  is  nothing 
to  be  said.  Like  Bunker  Hill,  and  Lexington  and  Concord,  "  there  they  stand."  They 
are  a  fixture  in  the  hearts  of  the  people  and  the  literature  of  the  world.  It  is  the 
captivating  style  of  the  work  that  strikes  us  forcibly  and  favorably.  This  is  to  be  an 
entirely  new  edition,  published  exclusively  by  subscription,  at  $1.50  a  volume.  One 
volume  will  be  published  every  month,  each  containing  a  novel  complete,  a  conveni 
ence  to  subscribers,  to  whom  the  payment  will  thus  be  made  light  and  easy.  They  aro 
to  be  illustrated  with  designs  on  wood,  and  vignette  drawings  on  steel,  in  line  and 
etching,  by  F.  0.  C.  Darley. 

"  TJie  States,"  Washington,  D.  C. 

SPLENDID  ILLUSTRATED  EDITION  OF  COOPEB'S  NOVELS. — It  is  a  desideratum  to  wit 
ness  the  perfection  to  which  the  publishers  have  attained  in  the  display  of  this  work( 
and  it  may  compare  most  favorably  with  the  productions  of  the  English  press.  The 
paper  is  unusually  fine  and  heavy,  type  distinct  and  good  size,  and  binding  such  as  will 
prove  an  heir-loom  for  several  generations,  as  it  appears  adapted  "  not  for  a  day,  but 
for  all  time." 

The  price  is  low — $1.50  per  volume — considering  the  beauty  of  the  work,  illustrated 
as  the  thirty-two  volumes  will  be,  each  with  two  large  designs,  the  work  comprising, 
in  all,  500  original  drawings  by  Darley,  who  stands  at  the  head  of  his  profession.  No 
library  should  be  viewed  as  complete  not  comprising  Cooper's  works,  if  the  proprietor 
designs  having  one  on  general  literature,  as  Cooper  is  identified  in  his  works  with 
both  modern  and  ancient  countries.  No  edition  that  we  have  yet  seen  reflects  so  much 
credit  on  publishers ;  and  we  hope  this  is  but  the  commencement  of  a  new  era  in 
solid,  substantial  binding— made  to  last. 

The  Newburgh  (N.  Y.)  Daily  News. 

COOPER'S  WORKS. — It  was  no  light  advantage  to  the  cause  of  American  literature 
that  at  its  very  outset  it  was  lifted  far  beyond  the  level  of  mediocrity,  in  the  depart 
ment  of  historical  fiction,  by  the  genius  of  Cooper.  And  this  advantage  has  not  been 
confined  even  to  the  circle  of  letters,  wide  and  genial  as  its  influence  is — but  the  im 
press  of  the  great  novelist's  creations  has  stamped  itself  upon  our  nationality,  and 
made  it  instinct  with  the  fresh  and  vivid  beauty  of  the  soil.  What  Shakspeare  was  to 


OPINIONS   OF   THE    PRESS.  15 

tlio  older  civilization  of  England— and  Scott  to  the  Mountain  homes  of  Scotland— what 
Beranger  is  to  the  bourgeoise  of  France,  that  Cooper  is  to  America.  "We  would  not 
be  understood  by  this  to  place  the  American  author  on  a  par  with  Shakspeare ;  but 
that  in  taking  up  and  giving  immortal  shape  and  life  to  the  genius  of  the  times  as  they 
ttjere,  and  not  as  they  may  be,  and  for  rendering  us  affectionately  familiar  with  the 
scenic  grandeurs  of  our  land  as  they  will  be  forever,  Cooper  must  occupy  a  foremost 
rank  in  our  literature  while  its  language  endures.  He  does,  it  is  true,  color  somewhat 
too  highly  his  Indian  heroes ;  though  it  must  be  remembered  that  we  are  not  familiar 
with  the  Indian  character  as  he  was;  but  his  descriptions  of  American  scenery  are 
true  to  the  life.  Who,  for  instance,  can  read  his  Spy,  and  not  feel  deeper  interest  in 
our  Eevolutionary  war,  as  well  as  a  better  appreciation  of  the  scenery  of  our  own 
river. 

We  have  all  read  Cooper,  and  hardly  need  any  eulogy  to  quicken  our  admiration  of 
his  genius — the  zest  with  which  each  generation  peruses  his  volumes  needs  no  sug 
gestions  from  the  critic.  But  we  have  been  led  into  these  remarks  by  the  publication 
of  an  edition  of  his  works  illustrated  by  Darley.  This  is  indeed  a  happy  combination 
— the  masterly  touches  of  Darley's  weird-like,  yet  truthful  pencil,  will  give  new 
developments  of  beauty  to  the  creations  of  the  novelist.  No  writer  opens  a  wider  or 
nobler  field  to  the  artist's  pencil ;  and  few,  if  any,  have  found  a  more  truthful  de 
lineator.  ....  We  are  indebted  for  this  felicitous  union  of  artistic  and  literary 
excellence  to  Townsend  &  Co.,  publishers,  of  New  York,  who  are  bringing  out  a  beau 
tiful  edition  in  handsome  volumes  on  the  best  paper,  and  with  the  clearest  type.  The 
designs  are  engraved  on  steel  in  line  and  etching — bringing  out  the  beauty  of  the 
original.  The  binding  is  worthy  of  the  work,  and  the  whole  will  make  this  the  finest 
and  most  complete  edition  of  the  great  novelist  yet  published.  The  price  is  only  $1.50 
per  volume— one  of  which  is  issued  every  month,  containing  a  complete  novel. 

The  Toledo  (Ohio)  Herald. 

MOHICANS. — It  is  nearly  a  quarter  of  a  century  since  James  Fenimoro  Cooper  wrote 
his  story  entitled  "  The  Last  of  the  Mohicans,"  and  we  venture  to  say  that  no  work  of 
the  kind  ever  published  has  met  with  more  popular  favor  amongst  the  truly  intelligent 
portion  of  the  community  than  this.  Tet,  considering  the  long  lapse  of  time  since 
the  first  editions  of  the  work  were  issued,  and  the  improvements  and  inventions 
which  have  been  made  in  printing,  engraving,  binding,  and  book-making  generally,  it 
is  quite  time  that  some  patriotic  and  enterprising  American  publisher  should  give  us^ 
for  our  libraries,  an  edition  of  Cooper's  Novels,  gotten  up  in  all  the  elegance  of  our 
day.  And  it  is  with  great  pleasure  that  we  notice  the  volumes  just  published  by 
W.  A.  Townsend  &  Co.,  of  New  Yo;-k.  We  congratulate  that  firm  upon  their  success 
in  introducing  an  edition  of  Cooper's  works  which  compares,  in  typography  and  finish, 
with  the  substance  and  beauty  of  the  text. 

The  Utica  (N~.  F.)  Observer. 

THE  SPY.— This  is  one  of  the  earliest  and  best  of  those  pre-eminent  American  his 
torical  romances,  which  have  gained  a  celebrity  scarcely  inferior  to  those  of  Sir  Walter 
Scott.  The  scene  of  the  story  is  the  neutral  ground  in  the  south-eastern  section  of 
this  state,  in  Westchester  county,  where  neither  the  Americans  nor  British  held  com 
plete  sovereignty.  The  hero  of  the  story  is  one  of  those  sui  generis  characters  who 
are  content  to  submit  to  all  sorts,  and  the  worst  misconception  of  motive  and  design? 
for  the  sake  of  advancing  to  the  best  of  their  abilities  some  cherished  cause.  "  The 
Spy''  was,  in  reality,  a  patriot,  as  the  sequel  proved.  He  was  employed  by  Washing 
ton,  but  often  appeared  to  be  an  adherent  of  the  British — his  purpose  being  to  affect 
Tory  principles  in  order  the  better  and  more  surely  to  advance  the  object  of  the  leader 
of  the  American  armies.  When,  after  the  war.  Congress  put  into  the  hands  of  a  prom, 
inent  statesman  funds  to  amply  reward  the  self-sacrificing  services  of  the  Spy,  tho 
noble-hearted  patriot  refused  to  accept  it,  on  the  ground  that  he  owed  the  country  tha 


16 

services  he  gave  her,  and  she  was  too  poor  to  grant  him  the  pecuniary  recompense 
offered.  This  was  a  real  incident,  and  the  novelist  has  woven  around  it  a  tale  of  en 
chanting  interest,  written  in  the  most  elevated  style,  furnishing  at  once  an  entertain 
ing  story  of  the  Revolution  and  a  literary  model.  The  delineation  of  character  is  forc 
ible  and  truthful American  youth  will  find  in  these  stories  of  the  past 

history  of  their  country  sources  of  true  and  unalloyed  enjoyment,  far  bet  er  and  more 
wholesome  than  the  meretricious,  superficial,  dissipating  fictions  so  prolific  at  the 
present  day,  and  which  cost  their  writers  so  little  real  thought  and  earnest  labor.  The 
family  library  which  contains  these  volumes  will  possess  a  real  treasure. 

The  Philadelphia  Bulletin. 

A  SPLENDID  WOKK.— It  was  quite  time  that  the  illustrious  novelist,  Cooper,  should 
receive  the  honor  of  a  splendid  edition,  and  we  are  pleased  to  see  that  "W.  A.  Towns- 
end  &  Co.,  of  New  York,  are  issuing  a  truly  magnificent  one,  which  adds  to  all  the 
attractions  of  exquisite  type,  paper,  and  binding,  those  of  five,  hundred  original  de 
signs  by  Darley,  executed  on  steel  and  wood,  in  the  costliest  style,  by  the  most  emi 
nent  engravers  in  the  country.  The  publishers  have,  in  fact,  begun  this  series  with 
the  determination  of  issuing  an  edition  which  shall  excel  in  elegance  any  collection  of 
works  ever  before  given  in  this  country.  There  have  been  more  expensive  and  showy 
single  volumes  published  here,  but  no  series  of  volumes  equal  to  these. 

This  series  is  doubly  interesting  from  the  fact  that  it  is  illustrated  by  Darley. 
Retsch  was  not  more  appropriately  the  artist  of  Goethe  than  is  Darley  that  of  our 
great  American  novelist.  This  has  long  been  understood  and  anticipated,  since  all  of 
Darley's  works  point  in  this  direction.  The  London  Athenaum,  in  calling  on  Darley 
to  illustrate  Cooper,  once  said :  "  "We  shall  then  enter  upon  a  new  region  of  art,  as 
dramatic,  picturesque,  and  vivid  as  any  artist  lover  has  had  the  pleasure  of  first  at 
tempting." 

"We  have  before  us  the  "Spy,"  "Pioneers,"  "Mohican,"  and  "Red  Rover,"  and, 
turning  over  their  beautiful,  tinted  pages,  we  feel  that  the  work  is  truly  the  most  ap 
propriate  monument  of  genius.  The  introductory  illustrations  and  the  vignettes  are 
in  the  very  spirit  and  life  of  the  incidents ;  nothing  could  correspond  more  perfectly 
to  the  impressions  formed  of  all  the  varied,  motley,  strange  company  who  pass  through 
the  deeply-stirring  scenes  of  truly  American  life.  There  are  to  be  thirty-two  volumes 
in  all,  containing  the  latest  corrections  of  the  author,  and,  in  fact,  rendered  as  perfect 
as  possible  in  every  respect,  whether  literary,  mechanical,  or  artistic. 

The  Century,  New  York 

The  new  illustrated  edition  by  Townsend  &  Co.  of  the  Novels  of  Cooper  is  receiving 
*he  attention  to  which  its  merits  fully  entitle  it.  It  appears  simultaneously  with  a 
new  English  illustrated  reprint  of  the  Waverley  Novels,  to  which  the  series  bears  a 
parallel  name  and  fame.  The  American  publishers  were  already  in  possession  of  a  set 
of  stereotype  plates  of  the  works  of  Cooper,  which  they  have  laid  aside  to  give  place 
to  this.inore  elegant  edition.  In  typographical  excellence  it  leaves  nothing  to  be  de 
sired.  The  engagement  of  Mr.  Darley  as  its  illustrator  has  added  greatly  to  its 
value.  The  variety  of  subject,  rural,  Indian,  military,  naval  life,  gives  the  best  oppor 
tunities  to  his  pencil,  which  has  acquired  a  distinguished  reputation  in  all  these  de 
partments.  The  wood-cut  vignettes  are  also  very  happy  in  design.  A  volume  of  this 
publication  appears  monthly,  at  a  very  reasonable  price. 

The  New  York  Day  Book. 

JAMES  FENIMORB  COOPEK.— No  American  writer  has  achieved  so  world-wide  a  pop. 
ularity  as  he  whose  name  stands  at  the  head  of  this  article ;  none  has  been  at  once  so 
much  admired  at  home  and  so  generally  read  abroad.  Indeed,  his  reputation  is  even 
greater  in  Europe  than  in  America.  His  works  have  been  republished  again  and  again, 
in  half  a  dozen  of  the  capitals  of  the  civilized  world,  have  been  translated  into  half  a 


OPINIONS    OF    THE    PRESS.  17 

dozen  languages,  and  great  Parisian  critics  have  not  hesitated  to  rank  Cooper  along 
side  of  Walter  Scott.  Many  causes  combined  to  procure  for  him  this  enviable  fame. 
Of  course  the  greatest  was  his  genius,  but  peculiarities  of  his  character  assisted  in 
making  this  greatness.  His  genius  and  his  character  were  both  essentially  American: 
he  chose  for  his  themes  the  deck  of  the  American  frigate,  the  life  of  tlio  American 
sailor,  or  the  paths  of  the  American  forest,  and  the  strife  between  the  American  In 
dian  and  the  American  pioneer.  The  very  names  of  the  novels  indicate  the  intense 
nationality  of  his  mind.  And  this  nationality  not  only,  as  it  should  have  done,  en 
dears  him  to  those  with  whom  he  shared  it,  and  not  only  was  a  claim,'gladly  recognized, 
upon  the  consideration  of  his  countrymen,  but  won  for  him  the  appreciation  of  others. 
....  Messrs.  W.  A.  Townsend  &  Co.,  of  New  York,  are  engaged  in  the  publication 
of  a  complete  edition  of  Cooper's  works,  which  is  designed  to  be  in  every  way  worthy 
of  the  great  American  novelist.  The  spirit  in  which  it  has  been  begun  is  a  worthy 
tribute  to  his  literary  excellence Three  are  already  before  us,  "The  Pio 
neers,"  "The  Eed  Eovcr,"  and  "The  last  of  the  Mohicans.'  They  are  gotten  up  in 
the  most  admirable  style  of  the  publisher's  art.  The  paper,  binding,  printing,  are  all 
of  the  first  class;  the  size  is  convenient,  and  the  whole  appearance  of  the  book  ele 
gant.  ....  No  previous  edition  of  Cooper's  works  is  at  all  comparable  with  this 
of  which  we  speak. 

The  Knickerbocker  Magazine,. 

W.  A.  Townsend  &  Co.'s  edition  of  Cooper's  Novels  is  attracting  the  attention,  and 
securing  the  wide  popularity  which  we  predicted  for  it  some  months  since,  while  the 
great  enterprise  was  as  yet  almost  in  embryo ;  but  the  materials  to  be  employed  and 
the  superb  original  illustrations,  indicated  with  sufficient  plainness  what  the  public 
had  good  reason  to  expect.  Nor  will  public  expectation  in  any  degree  be  disappointed. 
The  pioneer  of  the  series  was  "  The  Pioneers,"  which  has  been  succeeded  by  "  The  Eed 
Eover,"  and  "  Last  of  the  Mohicans."  It  would  be  idle,  at  this  late  day,  to  speak  of 
the  character  of  these  or  other  kindred  wrorks,  which  have  made  Cooper's  name  and 
literary  fame  known  not  only  "wherever  the  English  language  is  read  and  spoken," 
but  as  well  where  many  oilier  languages  are  read  and  spoken.  Hence,  it  remains  only 
to  be  stated,  that  in  the  conception  ajid  execution  of  the  engravings  by  Darley,  who 
has  the  rare  faculty  of  entering  into  the  very  spirit  of  his  author;  in  the  firm 
and  beautiful  paper,  made  expressly  for  this  edition ;  in  the  clear  and  elegant  typo 
graphical  execution ;  and  in  that  rich  and  tasteful  binding  of  the  volume,  there  is 
nothing  left  to  desire,  save  the  ability  to  purchase  them ;  and  this,  fortunately,  the 
publishers  place  within  the  easy  reach  of  all  good  book-buyers. 

TJie  New  York  Tribune. 

THE  SPY.— The  unrivalled  illustrations  of  this  edition  by  Mr.  Darley,  give  each 
successive  volume  a  new  interest  as  it  issues  from  the  press.  The  artist  has  caught 
the  very  spirit  of  the  author  in  his  characteristic  designs,  which  are  reproduced  with 
excellent  effect  by  the  skill  of  the  engraver.  In  every  respect,  this  beautiful  library 
edition  deserves  to  bo  in  the  hands  of  the  admirers  of  Fcnituore  Cooper. 

The  Independent,  N&io  York. 

COOPKK'S  NOVELS. — Messrs.  "W.  A.  Townsend  &  Co.,  of  this  city,  are  publishing  a 
beautiful  edition  of  Cooper's  novels,  large  duodecimo,  printed  in  fair  type  upon  sub 
stantial  paper,  and  illustrated  with  steel  and  wood  engravings  by  the  first  artists. 
"Eed  Eover,"  the  first  of  the  series,  is  illustrated  in  a  spirited  manner,  by  Darley, 
whose  skill  is  not  surpassed  by  any  European  artist.  The  works  of  Fenimore  Cooper 
are  as  fresh  to-day  as  when  first  they  fired  our  youthful  imagination  with  the  stirring 
scenes  of  border  life,  and  the  braveries  and  perils  of  the  sea.  The  American  novelist 
still  remains  without  a  peer  in  that  department  of  fiction  which  his  genius  so  bril 
liantly  illustrated;  and  he  will  be  read— -always,  wo  hope,  with  that  moderation  which 
should  control  our  reading  of  fiction— so  long  as  American  literature  shall  have  a  name. 
This  attractive  edition  will  greatly  enlarge  Uio  circle  of  Cooper's  readers  and  admirers. 


18  COOPER'S  WORKS. 

The,  Pittsburgh  Gazette. 

TIIE  SPY. — This  is  the  fourth  volume  of  the  uniform  edition  of  Cooper's  Works  now 
in  course  of  publication  by  Townsend  &  Co.,  of  New  York.  We  have  before  referred 
to  the  enterprising  spirit  manifested  in  getting  out  this  superb  edition,  and  take  occa 
sion  again  to  recommend  it  In  the  beauty  of  its  typography  it  is  unequalled,  while 
the  illustrations  are  of  the  first  order,  and  the  binding  most  substantial,  rendering  it 
the  handsomest  library  edition  of  any  work  ever  issued  in  the  United  State^. 

"The  Spy"  was  one  of  the  most  popular  of  Cooper's  novels,  at  the  time  of  its  issue, 
and  deservedly  retains  its  popularity.  It  is  a  thrilling  romance,  worthy  of  the  en 
larged  fame  of  the  author.  We  hope  to  see  this  edition  attain  a  wide  popularity. 

The  Daily  Advertiser,  Detroit. 

"Tire  SPY." — Messrs.  Townsend  &  Co.,  of  New  York,  who  are  issuing  Cooper's 
novels  in  a  style  far  superior  to  any  with  which  they  have  ever  before  been  clothed, 
have  just  published  the  fourth  volume  of  their  admirable  series.  It  is  "The  Spy," 
one  of  the  best  of  the  charming  works  which  made  their  author  famous.  Like  the 
volumes  which  preceded  it,  it  is  clearly  and  elegantly  printed  on  beautiful  paper,  and 
its  illustrations  are  by  that  prince  of  artists,  F.  6.  C.  Darley.  The  publishers  attempt 
ed  a  great  enterprise  in  publishing  the  productions  of  the  great  American  novelist  in 
this  superb  style,  and  we  are  glad  to  learn  that  it  is  likely  to  prove  successful.  The 
subscriptions  to  this  series  are  largely  and  constantly  increasing,  and  promise  to  them 
a  circulation  which  they  richly  deserve. 

The  Daily  inquirer,  Cincinnati. 

We  have  received  from  Kobert  Clarke  &  Co.,  No.  55  West  Fourth-street,  Cooper's 
"  Spy,"  from  the  press  of  W.  A.  Townsend  &  Co.,  New  York,  with  illustrations  by 
Darley.  What  more  could  we  add  in  the  way  of  praise  ?  The  first  of  American 
novelists,  and  the  first  of  American  designers.  The  letter-press  of  the  book  is  beauti 
fully  clear  and  perspicuous,  and  the  tale  itself  was  the  most  popular  novel  of  the  day 
in  which  it  was  issued,  «md  its  interest  is  as  fresh  now  as  ever. 

"  The  Press,"  Philadelphia. 

W.  A.  Townsend  &  Co.,  of  New  York,  have  published  another  volume  (tho  fourth) 
of  their  magnificent  edition  of  the  novels  and  romances  of  Fenirnore  Cooper,  with 
first-class  engravings,  on  steel  and  wood,  from  original  drawings  by  Darley,  whom  wo 
are  proud  to  claim  as  a  Philadelphian.  Even  the  London  Athenceum,  always  so  diffi 
cult  with  American  books,  smiles  grimly  upon  this  superb  edition  of  Cooper,  and  ad 
mits  that  in  paper,  binding,  printing,  and  illustration,  every  thing  has  been  done  to 
make  it  worthy  of  the  most  liberal  patronage.  The  new  volume  contains  "The  Spy," 
which  was  the  first  of  Cooper's  American  novels.  The  illustrations  are  beautiful. 
The  vignette  (on  steel)  representing  the  escape  of  Harvey  Birch,  is  a  perfect  gem. 
"  The  Spy  "  contains  two  of  the  best  characters  ever  drawn  by  Cooper — Harvey  Birch, 
the  Spy,  and  the  grave  but  gallant  gentleman,  Mr.  Harper,  who  eventually  appears  as 
Washington  himself.  Prefixed  to  this  edition  is  the  author's  introduction,  giving  a 
history  of  the  writing  of  the  book,  and  the  real  incident  which  suggested  it 

The  Neio  Orleans  Daily  Picayune. 

Wo  are  indebted  to  J.  C.  Morgan  &  Co.,  Booksellers,  Exchange  Place,  next  the 
Post  Office,  for  three  volumes  of  the  new  edition  of  Cooper's  works,  published  by  W. 
A.  Townsend  &  Co.,  New  York,  .and  illustrated  by  Darley. 

"Tha  volumes  are  the  "  Pioneers,"  the  "Red  Rover,"  and  the  "Last  of  the  Mohi 
cans."  The  illustrations  from  Dnrley's  drawings  are  very  beautiful  indeed,  whilst  tho 
binding,  printing,  types,  paper,  and  general  style  of  the  edition  are  exceedingly  hand- 


A.LL   ^JBOTJT    IT; 

.          OR, 

THE  HISTORY  AND  MYSTERY  OF  COMMON  THINGS. 

One  volume,  12mo.,  360  pp.     Price  $1. 
(Sent  by  mail  to  any  address,  on  receipt  of  the  price.) 


In  this  volume  is  condensed  a  vast  amount  of  information  upon  almost  every  sub 
ject  within  the  range  of  Art  and  Science,  or  in  relation  to  the  history  and  uses  of 
Natural  and  Artificial  Productions.  It  affords  a  library  in  itself,  and  serves  to  post  the 
reader  in  those  thousand  matters  of  Fact  and  Information  so  necessary  to  every  person 
of  intelligence,  and  yet  so  inaccessible  to  ordinary  research. 

ITS    CONTENTS    EMBRACE 

ATJ.  ABOUT  Tea,  Coffee,  Cocoa,  Chocolate,  and  other  Infusions. 
ALL  ABOUT  Tropical  and  Imported  Fruits,  their  manner  of  growth,  etc. 
ALL  ABOUT  Coal  and  jts  formation,  Salt,  and  the  Salt  Mines. 
ALL  ABOUT  Leather  and  Tanning. 
ALL  ABOUT  Artificial  Light,  etc. 

ALL  ABOUT  Paper  and  Paper-making,  Papier  Mache,  etc. 
ALL  ABOUT  Glass,  Porcelain,  Pottery,  China  "Ware,  and  other  Wares. 
ALL  ABOUT  Textile  Fabrics,  Cotton,  Linen,  Wool,  and  Silk,  and  the  innumer 
able  fabrics  into  which  they  are  woven. 
ALL  ABOUT  Cereals,  Grains,  Breadstuff's,  Bread  Fruit,  etc. 
ALL  ABOUT  Butter,  Cheese,  etc. 

ALL  ABOUT  Fermented  Liquors,  Wines,  Malt  Liquors,  etc. 
ALL  ABOUT  Medicines,  etc.    ABOUT  Spices,  etc. 
ALL  ABOUT  Metals,  Iron,  Copper,  Lead,  Tin,  etc.,  etc. 
ALL  ABOUT  Minerals,  the  Precious  Stones,  etc.,  etc. 
ALL  ABOUT  the  Atmosphere,  Electricity;  ABOUT  Geology;  ABOUT  Roots, 

Stems,  and  Leaves,  etc. 

ALL  ABOUT  Engravings,  Printing,  the  Arts  and  Sciences. 
ALL  ABOUT  Winds,  Waves,  Tides,  etc. 
ALL  ABOUT  a  Thousand  Miscellaneous  Subjects, 

INVALUABLE    FOR    CONVENIENT   [REFERENCE. 

AGENTS  and  CANVASSEES  will  find  this  a  most  profitable  work  to  sell,  as  it 
supplies  a  want  felt  by  all  classes,  in  all  sections  of  the  country.  Full  particulars 
furnished  on  application  to  the  publishers, 

W.   A.    TOWNSElViD   &   CO., 

46  WALKER  STREET,  NEW  YORK. 


1LLJT 


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itenewed  books  are  subject  to  immediate  recall. 


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General  Library  Y  ad' 

University  of  California     ice. 
Berkeley 


THE  HORSE"  one  of  the  most  profitable  which  they  can  undertaKe 
sell.     For  particulars  address  the  Publishers. 


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AN  PERIOD  1 
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